1. New guide to oil stocking measures

On 25 January 2013 DECC published a guide to the oil stocking obligations which have been adopted in the UK.  Oil stocking obligations were first implemented in the UK under the Energy Act 1976 in order to meet international (and subsequently EU) obligations to hold a minimum level of oil stocks which can be employed in the event of an emergency.  In September 2009 the European Council promulgated a new Directive which was required to be transposed by Member States by 31 December 2012.

DECC's guide can be viewed by clicking on this link.  The Oil Stocking Order 2012, which came into force on 31 December 2012 (as required under European Council Directive 2009/119/EC), is available to download here.

2. Smart metering update

On 24 January 2013 DECC published its response to Part 1 of its consultation on the second version of the Smart Metering Equipment Technical Specifications (SMETS 2).  The consultation response, the impact assessment and the first iteration of SMETS 2 notified to the European Commission can be viewed here.

The first iteration of SMETS was designated on 18 December 2012 while DECC progressed the SMETS 2 consultation launched in August 2012.

The consultation response sets out DECC's decisions in relation to 16 of the 50 questions raised in the consultation in relation to the development of SMETS 2 and related operational licence conditions.  In terms of operational requirements, the Government will introduce new supplier licence conditions to ensure that domestic consumers and micro-businesses have access to smart meter functionality and information.  The new licence conditions are expected to come into force later in 2013.

DECC hopes to publish Part 2 of the consultation response covering the remaining questions relating to SMETS 2 development, governance and assurance and next steps in spring 2013.  

3. Consultation: shortfall cost recovery mechanism for energy supply company administration

On 8 January 2013 DECC launched a consultation on a proposed mechanism for Government to recover its costs in the event that it provides funding to an energy supply company in administration.

The Energy Act 2011 introduced the special administration regime for energy supply companies and empowered the Secretary of State to issue grants, loans, guarantees and indemnities in order to keep a supplier as a going concern until it is either rescued, sold or its customers are transferred to other suppliers.  As there may be circumstances where the company in administration is not be able to repay some or all of the government funding, DECC has proposed licence changes to enable government to recover such sums from industry (and ultimately the consumer) instead.  The proposed changes will amend National Grid's electricity transmission and transporter licences and electricity supply and gas shipper licences.

The consultation is available to download here.  Interested parties may wish to respond to the consultation, which closes on 15 March 2013, to ensure their views are taken into account.

4. New regulations to reduce gas theft

Ofgem has issued a new Direction under Standard Licence Condition 12A of the gas supply licence the requiring licensees to implement new measures to reduce gas theft.

The Direction, which came into effect on 8 January 2013, provides that licensees must appoint and maintain an independent Theft Risk Assessment Service (TRAS) from March 2014.  Amongst other obligations, licensees must procure that the TRAS sets an appropriate annual gas theft reduction target and, in consultation with Ofgem and industry players, puts in place a methodology to establish this target.

The Direction can be downloaded from Ofgem's website here.  

5. Useful links