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Energy Bill

moved Amendment No. 68A: 68A: Clause 81, page 74, line 24, at end insert— ““( ) provision requiring a levy to be raised on gas transportation or electricity distribution charges and paid out to licensees in order to cover, in whole or in part, the cost of stranded meter assets; ( ) provision requiring the holder of a licence, solely or jointly with other licence holders, to tender for the purchase of services related to meters on an exclusive basis in relation to a specified area”” The noble Lord said: This amendment deals with two important areas in establishing the terms of a future smart meter rollout: stranding and the delivery model. Neither can be established until the impact assessment work, which the Minister discussed, has been completed by DBERR towards the end of the year; in an earlier question, we established that that is an elastic period. It is important that the Bill is amended in this way to ensure that no options are precluded before the decision-making process is completed. The first subsection deals with stranding and the need to be able to compensate for the potential stranding costs that the industry—in particular, network operators—would face if the decision is taken to mandate an accelerated rollout of domestic smart meters. Although it was originally thought that existing provisions of gas and electricity legislation would deal adequately with this, a project of this scale is unprecedented. Closer examination has revealed an anomaly in Section 7B(5)(a)(iii) of the gas legislation, meaning that only gas suppliers or shippers, rather than transporters who are most likely to be affected, can be compensated. The second subsection is designed to strengthen the clauses to ensure that no delivery options are ruled out by the terms of the Bill before the completion of the impact assessment. Clause 81 is probably not legally good enough to support the regional franchise model—at least, not without exposing the industry to a significant risk of challenge for infringement of competition law principles. The industry feels that there is sufficient doubt to justify a positive clarifying amendment to ensure that no rollout option should be precluded by the legal drafting. The industry is aware that more work must be done to complete the case for regional franchise model, but competition law precludes continuing this work. If Clause 81 is not amended, the decision on the rollout suggests that there is a real possibility that the regional franchise model will be ruled out before proper consideration can be given to whether it is the right model. The industry feels that it is vital that the enabling clause does not presuppose the outcomes or restrict the scope of delivery of the smart meter rollout. I hope that the Minister sees the amendment as a clarifying one, so that the consultation can be undertaken without any one issue or other being ruled out. I beg to move.