Malcolm Wicks (Minister of State (Energy), Department for Business, Enterprise & Regulatory Reform; Croydon North, Labour)

Just a brief description—the purpose of this clause is to clarify the operation of section 67(1)(c) of the Utilities Act 2000. The Secretary of State has the power to preserve, modify, replace or otherwise deal with arrangements which relate to the non-fossil fuel obligation, the original support mechanism for renewable electricity before the RO was introduced. The non-fossil fuel obligation, or NFFO arrangements, were put in place through orders made under the original section 32 of the Electricity Act 1989. Under the NFFO, electricity suppliers enter into fixed-term contracts with generators for the purchase of renewable electricity. That ensures that renewable generators get a specified price, as set out in the contract for their renewable electricity. The last of those contracts runs up to 2018.

The 2000 Act replaced the NFFO regime with the RO and made provisions for the continuance of NFFO contracts. In particular, section 67(1)(c) provided a power whereby the original NFFO arrangements could be preserved, modified, replaced or otherwise dealt with. The amendment to section 67(1)(c) clarifies that the Secretary of State has the requisite powers to preserve, modify, replace or otherwise deal with arrangements which have replaced original NFFO arrangements. I move that this clause stand part of the Bill.