Part 1: Nuclear Energy Generation Projects: Regulated Asset Base Model Section 6: Licence modifications: designated nuclear companies
This section provides the Secretary of State with the power to make licence modifications for the purposes of applying the nuclear RAB model to a designated nuclear company.
	Subsection (1) gives powers to the Secretary of State to modify any condition or term of a designated company’s electricity generation licence.
	Subsection (2) makes clear that this power can only be used for the purposes of facilitating investment in the design, construction, commissioning and operation of nuclear energy generation projects.
	Subsection (3) confirms that this power of modification may only be exercised in relation to a nuclear company while a designation under section 2(1) has effect in relation to that company.
	Subsection (4) places an obligation on the Secretary of State to have regard to certain matters when making modifications under subsection (1). These considerations include:
The duties the Secretary of State has regarding the reduction of carbon emissions, specifically targets and budgets, under the Climate Change Act 2008;
the interests of existing and future electricity consumers, including in relation to the cost of electricity and the security of electricity supply;
the costs, expenditure and liabilities that the nuclear company could reasonably be expected to incur in carrying out its activities in relation to the nuclear project;
the need for the nuclear company to be able to finance its activities;
the need to ensure that the nuclear company has appropriate incentives when carrying out its activities; and
any other matters the Secretary of State considers appropriate.
	Subsection (5) provides examples of the types of modifications to the conditions of a designated nuclear company’s licence that could be made by the Secretary of State. This includes provision relating to (among other things): the calculation of the allowed revenue; payments under a revenue collection contract (as defined in Part 2); the company’s activities; the Authority’s functions in relation to the regulation of the designated nuclear company under a RAB model; decisions of the Authority that the nuclear company could refer to the Competition and Markets Authority under section 10; and relevant licensee nuclear company administration orders (as defined in section 31). These examples are illustrative and so this provision does not restrict the scope of the power set out in subsection (1)(a).
	Subsection (6) clarifies that in exercising their power to modify the terms of a designated nuclear company’s licence, the Secretary of State could, for example, make provision in relation to the circumstances in which the company could have its generation licence revoked.
	Subsection (7) gives the power to the Secretary of State to modify the standard conditions of generation, transmission, distribution and supply licences (and associated documents and agreements, such as industry codes). Subsection (8) is clear that the Secretary of State can only make these modifications if they consider it appropriate for consequential, supplementary or incidental purposes. This allows the Secretary of State to ensure the effective implementation of the RAB model for a designated nuclear company.
	Subsection (9) states that modifications made under subsections (1) or (7) only come into effect where the nuclear company enters into a revenue collection contract.
	Subsection (10) makes it clear that reference within this section to the activities of the nuclear company are to the company’s activities in relation to the design, construction, commissioning and operation of the relevant nuclear project, and include its activities in complying with obligations under an approved FDP under the Energy Act 2008.