Clause 44

Energy Bill – in a Public Bill Committee at 12:45 pm on 4 March 2008.

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Modification of approved programme

Question proposed, That the clause stand part of the Bill.

Photo of Malcolm Wicks Malcolm Wicks Minister of State (Energy), Department for Business, Enterprise & Regulatory Reform

Before I start on the clause, I would like to mention to the Committee that clauses 44, 45, 46 and 47 all deal with the subject of modifications to an approved programme. Hon. Members may find it useful to keep all four clauses in mind when we discuss them individually. Clause 44 sets out who can propose a modification and what the proposal can consist of, while clause 45 sets out the procedure for modifying an approved programme. Clause 46 is slightly different as it allows the Secretary of State to set out in regulations how the procedure described in clause 45 can be disapplied. Clause 47 sets out when that modification takes effect.

Clause 44 gives certain persons the ability to propose amendments to an approved, funded decommissioning programme. That could include both financial and technical modifications. Those who can propose modifications are the Secretary of State, the site operator, and any other person who has obligations under the programme, providing that the site operator consents to the proposed modification. The aim of the power is to allow for the  modification of a programme once it has been approved. The operator would be expected to proposed modifications where a change in the station had a significant impact on decommissioning or waste cost estimates. Modifications may also need to be made where there has been a breach in the programme. Operators and the Secretary of State will be free to propose modifications at any time, but persons with obligations under the programme will be able to submit a modification only with the approval of the operator. That is because the operator is ultimately responsible for the content and implementation of the programme.

As well as making modifications to the programme, the clause allows the Secretary of State to impose new or additional obligations on any body corporate associated with the operator. That might be necessary where the level of security that a body corporate can provide has diminished in some way, and there is a requirement for another body corporate associated with the operator to provide that additional security. The Secretary of State’s power to make modifications or impose obligations is integral to the enforcement and sanction regime. For example, in the event of a breach in the programme, the Secretary of State might choose to modify the programme by imposing an obligation on the operator to put in place a procedure to ensure that the breach did not occur again before, or instead of, taking formal enforcement action.

Similar powers in relation to the modification of a decommissioning programme exist elsewhere. The Petroleum Act 1998 gives the Secretary of State the power to revise a programme to decommission offshore oil and gas installations. The provisions of the Energy Act 2004 give the Secretary of State a similar power in relation to the decommissioning of offshore renewable installations. The power to modify an approved programme is key if the programme is to remain up to date, and to ensure that the cost estimates, technical plan and financial arrangements remain prudent.

Photo of Charles Hendry Charles Hendry Shadow Minister (Business, Enterprise and Regulatory Reform)

There are a number of concerns to express and points to make in relation to the clauses. It might be sensible to outline them at this stage, although I will probably get in only three sentences before the Minister goes for his lunch break. My concern is about the extensive powers that the Secretary of State seems to have. Businesses will be building new reactors based on an understanding of the costs involved in planning, building, running and decommissioning those power stations, and of getting rid of the waste. It is clear that they are looking for considerable certainty about the exposure to risks and to any additional costs. The clause seems to give the Secretary of State the right unilaterally to tear up an agreement and impose much tougher conditions. Businesses appear powerless to stop this, and as the Minister said in an earlier discussion, they do not have a right of appeal.

It being One o’clock, The Chairman adjourned the Committee without Question put, pursuant to the Standing Order.

Adjourned till this day at Four o’clock.