Schedule 9: Independent System Operator and Planner: transfers Schedule 15: Competitive tenders for electricity projects Part 1 – Amendments of Electricity Act 1989
Paragraph 1 of the Schedule provides that the amendments described by the subsequent paragraphs are made to the Electricity Act 1989 ("the Act").
	Paragraph 2 adds two new sections to the Act. The first enables the Secretary of State to make regulations setting criteria to be applied to electricity projects to determine their eligibility for competitive tenders, which in turn allows for competition to be enabled in respect of certain electricity projects. ‘Relevant electricity project’ is defined for that purpose. The second enables the Secretary of State to appoint a ‘delivery body’ to run tenders for electricity projects, both onshore and offshore. The Secretary of State may appoint different bodies to run different types of competition (for example, for onshore and offshore networks, where appropriate). It will also allow for the Secretary of State to indemnify a delivery body, where that body is not the Authority (Ofgem), for cost incurred in association with any judicial review proceedings brought against them in relation to a competitive tender under this Part of the Act.
	Paragraph 3 substitutes existing sections 6C and 6D of the Act with five new sections. New section 6C enables the Authority to make regulations to facilitate tenders ("tender regulations"). The other four new sections set out the scope of what tender regulations may cover. This includes functions and powers of the Authority (Ofgem) and the delivery body, the methodology for tenders, and the recovery by the Authority and/or delivery body of costs expended in association with tenders. In order to allow for effective tenders, tender regulations may also include provision for the Authority, delivery body and a contract counterparty to seek information which is relevant to tenders. New section 6CC of the Act details the treatment of connection applicants.
	Paragraph 4 amends section 6E of the Electricity Act 1989 to allow property schemes created in furtherance of a competition run under this part of the Act to cover onshore network solutions as well as offshore tenders. Property schemes allow for the creation or transference of property, rights or liabilities necessary for the preferred and/or successful bidder to deliver the outcome of the competition.
	Paragraphs 5 and 6 amend sections 6F and 6G of the Act respectively to allow for transmission to take place during a commissioning period without the person undertaking the activity needing a transmission licence.
	Paragraph 7 amends section 6H of the Act to give the Authority (Ofgem) the ability to amend licences and codes to give effect to the outcome of competitions onshore as well as offshore.
	Paragraph 8 amends section 11A of the Act. Section 11A sets out the process to modify conditions under licences granted by the Authority (Ofgem). This amendment clarifies that this general process to modify conditions does not apply to modification of conditions of licences following a competition. For this scenario, new section 6CC(5)(a) (set out in paragraph 2 of Schedule 5) applies and sets the process for such modifications.
	Paragraph 9 amends section 64 of the Act, which sets out definitions used in this Part of the Electricity Act 1989, to include definitions introduced by this legislative measure.
	Paragraphs 10 to 26 amend Schedule 2A of the Act to cover onshore as well as offshore electricity networks in terms of property schemes.
	Paragraph 11 enables the Authority (Ofgem) to make a property scheme which allows for the creation or transfer, as is relevant, of rights, liabilities and property necessary or expedient for operational purposes to enable delivery of the outcome of a competitive tender in onshore electricity networks.
	Paragraph 12 clarifies that a property scheme should not be created if the Authority (Ofgem) considers it appropriate that the successful bidder obtains the relevant rights, liability and property by another route.
	Paragraph 13 revokes paragraph 5 of Schedule 2A of the Act. This was a sunset provision, which limited property schemes to the transitional period after offshore competition sections of the Energy Act 2004 were introduced.
	Paragraph 14 makes amendments to paragraph 12 of Schedule 2A to allow property schemes (as described above) made under Schedule 2A to cover scenarios of construction and commissioning of an asset, as well as operation. This gives effect to onshore competition where early or late model competitions are used; that is, competition before or after planning permission for the build, ownership and operation of a network solution. This extends from the current regime for offshore networks, which only allows for very late model competition, where only the ownership and operation of an asset which is already built is tendered for.
	Paragraph 15 clarifies that no property scheme can be made until the relevant licence or contract (as appropriate to the winning solution) is in place.
	Paragraphs 16 to 20 make amendments to other paragraphs in Schedule 2A in the same way as set out in Paragraph 14 for paragraph 12 of Schedule 2A, so that Schedule 2A can be used in onshore as well as offshore competition.
	Paragraph 21 amends Paragraph 35 of Schedule 2A: paragraph 35 now sets out notification procedures for the Authority (Ofgem) or a contract counterparty to notify of its intent to grant a licence and/ or grant a contract to the winning bidder. The amendment extends the current paragraph 35 from just the Authority’s notification to a contract counterparty’s notification. This gives effect to competition to allow for licensable and non-licensable solutions as an outcome of onshore competition.
	Paragraph 22 amends paragraph 36, which sets out processes and definition of a successful bidder, to cover onshore and offshore competition, and licensable and non-licensable solutions.
	Paragraph 23 inserts a new paragraph providing the Authority (Ofgem) with powers to appoint a transmission owner or distribution owner of last resort in the event that the winning bidder’s solution or the owner is unable to continue functioning under the terms of its contract and/or licence.
	Paragraph 24 amends definitions used in Schedule 2A of the Act to refer to onshore and offshore competitions.
	Paragraph 25 amends paragraph 6 in Schedule 4 of the Act to allow for winners of onshore competition exercises to be included in provisions regarding powers of licence holders.