Overview

This bill establishes a regulated asset base (RAB) model for financing new nuclear power generation projects in the UK. It outlines how these projects will be funded, regulated, and managed, including provisions for revenue collection, a special administration regime for licensees, and adjustments to how associated bodies are defined for decommissioning purposes.

Description

The bill is divided into four parts. Part 1 introduces the RAB model, allowing the Secretary of State to designate nuclear companies for this model. This designation includes licence modifications to ensure the project’s financial viability, considering consumer interests and carbon reduction targets. The Competition and Markets Authority (CMA) is given the power to appeal decisions about allowed revenue. Part 2 details the revenue collection process, establishing revenue collection contracts between designated companies and designated counterparties. Electricity suppliers will fund these contracts, with provisions for payments, financial collateral, and dispute resolution. The Secretary of State can direct counterparties to offer contracts and manage transfer schemes in case of counterparty changes. Part 3 establishes a special administration regime for designated companies facing financial difficulties. The existing insolvency framework is modified to ensure continued electricity generation. Part 4 contains miscellaneous provisions, notably clarifying the definition of "associated" bodies for nuclear site decommissioning funding, ensuring that certain financial interests held by other bodies are disregarded for this purpose.

Government Spending

The bill mandates government spending on expenditure incurred by the Secretary of State, the Competition and Markets Authority, and the Gas and Electricity Markets Authority (Authority) in implementing the Act. Specific figures are not provided in the bill text itself.

Groups Affected

• Nuclear Companies: Potentially significantly affected through licence modifications, revenue collection contracts, and the special administration regime.
• Electricity Suppliers: Required to make payments to fund the RAB model via revenue collection contracts, including potential provision of financial collateral.
• Revenue Collection Counterparties: Designated entities responsible for managing revenue collection, subject to specific duties and directions by the Secretary of State.
• Competition and Markets Authority (CMA): Given a role in appealing decisions on allowed revenue for designated companies.
• Gas and Electricity Markets Authority (Authority): Takes on regulatory functions in overseeing the RAB model and revenue collection.
• Consumers: Indirectly affected through electricity prices and the security of supply, factors that the bill aims to manage.
• Bodies Corporate Associated with Site Operators (Decommissioning): The definition of “associated” is amended, potentially impacting their responsibilities for decommissioning funding.

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