Report (2nd Day)

Part of Energy Bill [HL] – in the House of Lords at 6:19 pm on 8th March 2011.

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Amendment 167

Tabled by Lord Whitty

167: Before Clause 99, insert the following new Clause-

"Compensation where the Secretary of State requests termination of offshore lease or agreement to lease

(1) The Secretary of State shall make a scheme (in this section, an "early termination compensation scheme") to have effect where-

(a) a lease granted or agreement to lease has been made by the Crown Estates for the purpose of construction and operation of a generating station powered by wind, wave or tidal energy, or of equipment for transmission of electricity at a site in United Kingdom territorial waters or the REZ;

(b) that lease or agreement to lease gives the landlord power to determine the lease or agreement where the Secretary of State so requests on the basis that the whole site, or any part of it, is required in connection with oil or gas works or rights; and

(c) the landlord proposes to determine the lease or agreement, as regards the whole site or any part of it, as a result of such a request.

(2) An early termination compensation scheme-

(a) must require the owner of, or person seeking to exploit, the oil or gas works or rights in question to pay compensation to the full extent of the loss which is likely to be incurred including the recovery of any wasted expenditure, loss of profits and any consequential loss suffered as a result of such works, by the lessee or holder of the agreement to lease as a result of the determination;

(b) may, subject to paragraph (a), make such provision as the Secretary of State considers appropriate for the computation of compensation;

(c) must make provision for the procedure applicable to the making and determination of claims, including provision for resolution of matters, in the event of disagreement, by an independent body;

(d) must provide for the Secretary of State, when satisfied that compensation as required by the scheme has been agreed or resolved, so to certify in writing; and

(e) may contain such other provision as the Secretary of State considers appropriate.

(3) The landlord must not determine the lease or agreement to lease until the Secretary of State has certified the determination in accordance with subsection (2)(d).

(4) Subsections (1), (2), (5), (6), (7)(b) and (8) of section 33 apply, with the necessary modifications, to an early termination compensation scheme."