PART 1 Introduction

Title and commencement_I1

1.—(1) These Regulations may be cited as the Warm Home Discount Regulations 2011.

(2) These Regulations come into force on the day after the day on which they are made.

Interpretation_I2

2.—(1) In these Regulations—

“broader group customer” is to be interpreted in accordance with regulation 18(1);

“ commencement date ” means the date on which these Regulations come into force;

“ compulsory scheme electricity supplier ” has the meaning given in regulation 5(1);

[^F1 “compulsory smaller electricity supplier” has the meaning given in regulation 5(6); ^F1]

“ core group customer ” has the meaning given in regulation 7(2);

[^F2 “couple” means—

“ domestic customer ” means an owner or occupier of domestic premises in Great Britain who is supplied with electricity or gas at those premises wholly or mainly for domestic purposes;

“ dual fuel ” means electricity and gas, where both are supplied to a domestic customer at the same domestic premises, by a person who is both a licensed electricity supplier and a licensed gas supplier;

[^F4 “eligibility statement” means a document which describes the criteria adopted by the Secretary of State for the purpose of providing the prescribed rebate in a scheme year to persons living in fuel poverty or in a fuel poverty risk group; ^F4]

[^F5 “eligible occupier of a mobile home” means an occupier of a mobile home—

[^F5 “energy advice” means advice on reducing or preventing the wastage of energy in domestic premises; ^F5]

[^F8 “fifth commencement date” means the date on which the Warm Home Discount (Miscellaneous Amendments) Regulations 2021 come into force; ^F8]

[^F9 “fourth commencement date” means the date on which the Warm Home Discount (Miscellaneous Amendments) Regulations 2018 come into force; ^F9]

“ group of companies ” means a holding company and the wholly-owned subsidiaries of that holding company; and “ holding company ” and “ wholly-owned subsidiary ” have the same meanings as in section 1159 of the Companies Act 2006 ( 3 );

[^F10 “guarantee credit” is to be construed in accordance with sections 1 and 2 of the State Pension Credit Act 2002 ; ^F10]

“ industry initiative ” has the meaning given in regulation 26(1);

“legacy spending”, and references to the amount of legacy spending incurred by a relevant supplier, are to be interpreted in accordance with regulation 21(2);

[^F5 “mobile home” has the meaning given in section 5 of the Mobile Homes Act 1983 ; ^F5]

“non-core spending obligation” is to be interpreted in accordance with regulation 13;

[^F5 “non-gas fuelled”, in relation to a property, means a property where the main space heating system is not—

where “mains gas” is a supply of the kind mentioned in section 5(1)(b) of the Gas Act 1986 , and a “district heating system” is a system that delivers heat through pipes or conduits to two or more domestic premises;, ^F5]

[^F5 “occupier” in relation to a mobile home means the occupier of that mobile home within the meaning given in section 1 of the Mobile Homes Act 1983 ; ^F5]

“ partner ” means a member of a couple;

“ the prescribed rebate ” means a rebate of—

“ relevant supplier ” means a compulsory scheme electricity supplier, or a scheme gas supplier which is connected to a compulsory scheme electricity supplier, which—

[^F12 “scheme electricity supplier” means—

“ scheme gas supplier ” has the meaning given in regulation 5(5);

“ scheme supplier ” means a scheme electricity supplier or a scheme gas supplier;

[^F13 “scheme year” means a period—

[^F5 “second commencement date” means the date on which the Warm Home Discount (Miscellaneous Amendments) Regulations 2015 come into force; ^F5]

[^F19 “smart meter advice” means advice on the benefits of using a smart meter in domestic premises; ^F19]

[^F20 “specified activity” has the meaning given in regulation 27A(1); ^F20]

“ state pension credit ” has the meaning given by section 1 of the State Pension Credit Act 2002 ( 4 );

[^F21 “third commencement date” means the date on which the Warm Home Discount (Miscellaneous Amendments) Regulations 2016 come into force; ^F21]

^F22 “ voluntary commitment ” means a commitment made by a licensed electricity supplier or a licensed gas supplier to the Secretary of State, in respect of the period from 1st April 2008 to 31st March 2011, to provide financial benefits to customers and carry out other initiatives, for the purpose of assisting persons in fuel poverty or in fuel poverty risk groups; ...

“ voluntary scheme electricity supplier ” has the meaning given in regulation 5(4) [^F23 and (4A); ^F23] ;

[^F24 “working days” means any day other than—

(2) For the purposes of these Regulations, an electricity supplier or gas supplier (A) is connected to an electricity supplier or gas supplier (B) if A and B are companies belonging to the same group of companies.

[^F25 (3) For the purposes of these Regulations, a prescribed rebate is undelivered if—

(a)the rebate was provided to a customer by tendering payment of the amount of the prescribed rebate to the customer, and the customer has not accepted that payment; or

(b)the rebate was provided to a customer who pre-pays for electricity or gas with credit in the amount of the prescribed rebate against the cost of future electricity or gas use, and the customer has not accepted that credit.^F25]

PART 2 The Scheme

Name and duration of scheme_I3

3.—(1) These Regulations establish a scheme for reducing fuel poverty, to be known as the Warm Home Discount scheme.

(2) The scheme has effect during the period from the commencement date to 31st March [^F26 2016 ^F26] (“the [^F27 first ^F27] scheme period”).

(3) The following duties and powers continue to apply after the end of the [^F28first^F28] scheme period—

(a)the duties of scheme suppliers under regulations 9(5) and (6), 24(2) and 30(3) and Part 1 of Schedule 3;

(b)the duty of the Secretary of State under regulation 10;

(c)the duties of the Authority under regulations 23 and 29 and Part 2 of Schedule 3; and

(d)the powers of the Authority under regulations 24(3) and 30(1) and (2).

[[^F29,F30 (4) The scheme also has effect during the period—

(a) from the third commencement date to 31st March 2018 (“the second scheme period”);

(b) from the fourth commencement date to 31st March 2021 (“the third scheme period”); and

(c) from the fifth commencement date to 31st March 2022 (“the fourth scheme period”). ^F30]

(5) The following duties and powers continue to apply after the end of the second scheme period [^F31 , after the end of the third scheme period and after the end of the fourth scheme period^F31] —

(a)the duties of scheme suppliers under regulations 9(6) and (7), 14(3A) and 30(3);

(b)the duty of the Secretary of State under regulation 10;

(c)the duties of the Authority under regulation 29; and

(d)the powers of the Authority under regulation 30(1) and (2).^F29]

Notification by suppliers_I4

4.—(1) Paragraph (2) applies to every—

(a)licensed electricity supplier; and

(b)licensed gas supplier which is connected to a licensed electricity supplier.

(2) A supplier to which this paragraph applies must notify the Authority by—

(a)^F3214 days after the commencement date; ...

(b)14th February in each of the years 2012, 2013 [^F33, 2014 [^F34 , 2017, 2019 and 2020^F34,F33]] ,

[^F35 (c)14 days after the second commencement date,^F35]

[^F36 (d)14 days after the third commencement date,^F36]

[^F37 (e)the 14th day after the fourth commencement date,^F37]

[^F38 (f)the 14th day after the fifth commencement date,^F38]

of the number of that supplier’s domestic customers on the preceding 31st December.

(3) If, before the commencement of these Regulations, a supplier has notified the Authority of the number of that supplier’s domestic customers on 31st December 2010, the Authority shall treat that as the supplier’s notification for the purposes of paragraph (2)(a).

[^F39 (3A) If, before the second commencement date, a supplier has notified the Authority of the number of that supplier’s domestic customers on 31st December 2014, the Authority shall treat that as the supplier’s notification for the purposes of paragraph (2)(c).^F39]

[^F40 (3B) If, before the third commencement date, a supplier has notified the Authority of the number of that supplier’s domestic customers on 31st December 2015, the Authority shall treat that as the supplier’s notification for the purposes of paragraph (2)(d).^F40]

[^F41 (3C) If, before the fourth commencement date, a supplier has notified the Authority of the number of that supplier’s domestic customers on 31st December 2017, the Authority shall treat that as the supplier’s notification for the purposes of paragraph (2)(e).^F41]

[^F42 (3D) If, before the fifth commencement date, a supplier has notified the Authority of the number of that supplier’s domestic customers on 31st December 2020, the Authority shall treat that as the supplier’s notification for the purposes of paragraph (2)(f).^F42]

(4) If a supplier does not notify the Authority in accordance with paragraph (2), the Authority shall determine the number of that supplier’s domestic customers on the preceding 31st December.

(5) For the purposes of this regulation, a supplier’s number of domestic customers is the number of domestic customers to whom it supplies—

(a)electricity (other than as part of a supply of dual fuel);

(b)gas (other than as part of a supply of dual fuel); or

(c)dual fuel,

with a supply of dual fuel being treated as a supply to two domestic customers.

(6) For the purposes of the following regulations, a supplier’s number of domestic customers is the number notified or determined under this regulation.

Scheme suppliers_I5

5.—(1) In relation to any scheme year, a person is a compulsory scheme electricity supplier if—

(a)that person—

(i)is a licensed electricity supplier; and

(ii)supplied electricity to domestic customers on the 31st December preceding the start of the scheme year; and

(b)one of the following conditions is satisfied.

(2) Condition 1 is that the supplier had at least 250,000 domestic customers on the 31st December preceding the start of the scheme year.

(3) Condition 2 is that—

(a)the supplier; and

(b)any licensed electricity suppliers and licensed gas suppliers which were connected to it on the 31st December preceding the start of the scheme year,

together had at least 250,000 domestic customers on that date.

(4) In relation to [^F43any of the scheme years 1 to 7^F43] , a licensed electricity supplier which is not a compulsory scheme electricity supplier is a voluntary scheme electricity supplier if the supplier gives notice to the Authority—

(a)in relation to scheme year 1, by 14 days after the commencement date;

(b)in relation to scheme years 2, 3 [^F44, 4 and 7^F44] , by 14th February preceding the start of the scheme year,

[^F45 (c)in relation to scheme year 5, by 14 days after the second commencement date,^F45]

[^F46 (d)in relation to scheme year 6, by 14 days after the third commencement date,^F46]

that the supplier wishes Part 3 of these Regulations to apply to it.

[^F47 (4A) A licensed electricity supplier is a voluntary scheme electricity supplier—

(a)in relation to scheme year 8, if—

(i)the supplier is not a compulsory scheme electricity supplier; and

(ii)the supplier gives notice to the Authority on or before the 14th day after the fourth commencement date that the supplier wishes Part 3 of these Regulations to apply to it;

(b)in relation to [^F48 scheme years 9 and 10^F48] , if—

(i)the supplier is not a compulsory scheme electricity supplier or a compulsory smaller electricity supplier; and

(ii)the supplier gives notice to the Authority by 14th February preceding the start of the scheme year that the supplier wishes Part 3 of these Regulations to apply to it.^F47]

[^F49 (c)in relation to scheme year 11, if—

(i)the supplier is not a compulsory scheme electricity supplier or a compulsory smaller electricity supplier; and

(ii)the supplier gives notice to the Authority on or before the 14th day after the fifth commencement date that the supplier wishes Part 3 of these Regulations to apply to it.^F49]

(5) In relation to any scheme year, a person is a scheme gas supplier if that person—

(a)is a licensed gas supplier;

(b)supplied gas to domestic customers on the 31st December preceding the start of the scheme year; and

(c)was, on the 31st December preceding the start of the scheme year, connected to a licensed electricity supplier which in the scheme year is a scheme electricity supplier.

[^F50 (6) In relation to scheme year 9, or a subsequent scheme year, a person is a compulsory smaller electricity supplier if—

(a)that person—

(i)is a licensed electricity supplier;

(ii)is not a compulsory scheme electricity supplier; and

(iii)supplied electricity to domestic customers on the 31st December preceding the start of the scheme year; and

(b)at least one of the conditions in paragraph (7) is satisfied.

(7) The conditions referred to in paragraph (6)(b) are that—

(a)the supplier had at least the relevant number of domestic customers on the 31st December preceding the start of the scheme year; or

(b)the supplier and any licensed electricity suppliers and licensed gas suppliers which were connected to the supplier on the 31st December preceding the start of the scheme year together had at least the relevant number of domestic customers on the 31st December preceding the start of the scheme year.

(8) For the purposes of paragraph (7), the “relevant number” is—

(a)in relation to scheme year 9, 200,000;

(b)in relation to a subsequent scheme year, 150,000.^F50]

[^F51Suppliers no longer participating in the scheme

5A.—(1) This regulation applies to a licensed electricity supplier in any scheme year if—

(a)the supplier is not a scheme electricity supplier in relation to the scheme year; and

(b)the supplier was a scheme electricity supplier in relation to the preceding scheme year.

(2) A licensed electricity supplier to which this regulation applies must—

(a)place a statement on its website that the supplier is not participating in the Warm Home Discount scheme; and

(b)notify its former core group customers in writing that the supplier is not participating in the Warm Home Discount scheme.

(3) The statement referred to in paragraph (2)(a) must—

(a)be placed in a prominent and publicly accessible location on the licensed electricity supplier’s website on or before the relevant date; and

(b)remain in a prominent and publicly accessible location on the licensed electricity supplier’s website during the remainder of the scheme year.

(4) The notification referred to in paragraph (2)(b) must, so far as is reasonably practicable, be made on or before the relevant date.

(5) In this regulation—

“former core group customer” means, in relation to a supplier, a person who—

“relevant date” means the date falling one month after the date on which the scheme year starts. ^F51]

PART 3 The core group

Determination of scheme customers by the Secretary of State_I6

6.—(1) The Secretary of State may in any scheme year give one or more notices to a scheme electricity supplier specifying persons to whom, subject to regulations 7 and 8, the supplier must provide the prescribed rebate.

(2)[^F52 In scheme years 1 to 7,^F52] A person may not be specified in a notice unless it appears to the Secretary of State that—

(a)the person is a domestic customer of the scheme electricity supplier; and

(b)the person, or the person’s partner, is in receipt of state pension credit.

[^F53 (2A) In scheme year 8, a person may not be specified in a notice unless it appears to the Secretary of State that—

(a)the person is a domestic customer of the scheme electricity supplier; and

(b)the person, or the person’s partner, is in receipt of guarantee credit.

(2B) In scheme years 9 and 10, a person may not be specified in a notice unless it appears to the Secretary of State that—

(a)the person is a domestic customer of the scheme electricity supplier; and

(b)either—

(i)the person meets the criteria described in any eligibility statement for the scheme year consulted on and published, before the start of the scheme year, by the Secretary of State; or

(ii)where, before the start of the scheme year, the Secretary of State has not consulted on and published an eligibility statement for the scheme year, the person, or the person’s partner, is in receipt of guarantee credit.^F53]

[^F54 (2C) In scheme year 11, a person may not be specified in a notice unless it appears to the Secretary of State that—

(a)the person is a domestic customer of the scheme electricity supplier; and

(b)the person, or the person’s partner, is in receipt of guarantee credit.^F54]

[^F55 (3) A notice containing personal information (within the meaning of section 40(5) of the Digital Economy Act 2017) may only be given if—

(a)the personal information is given with the consent of the persons to whom it relates;

(b)regulations are in force under section 142 of the Pensions Act 2008 and those regulations authorise the Secretary of State to provide the electricity supplier with the personal information contained in the notice; or

(c)the Secretary of State is authorised by section 36 of the Digital Economy Act 2017 to provide the electricity supplier with the personal information contained in the notice.^F55]

[^F56 (4) In scheme year 5, a notice may not be given after 1st March 2016.^F56]

[^F57 (5) In scheme year 7, a notice may not be given after 1st March 2018.^F57]

[^F58 (6) In scheme year 10, a notice may not be given after 1st March 2021.^F58]

[^F59 (7) In scheme year 11, a notice may not be given after 1st March 2022.^F59]

Provision of rebate to core group customers_I7

7.—(1) A scheme electricity supplier which is given a notice under regulation 6(1) must, subject to regulation 8, provide the prescribed rebate in accordance with this regulation to each person specified in the notice who—

(a)is a domestic customer of the supplier; or

(b)has previously been a domestic customer of the supplier, if during the scheme year in which the notice is given the supplier has informed the Secretary of State that the person is a domestic customer of the supplier.

(2) A “ core group customer ”, in relation to a scheme electricity supplier, is a person specified in a notice given to that supplier under regulation 6(1) who falls within sub-paragraph (a) or (b) of paragraph (1).

(3) A scheme electricity supplier must provide the prescribed rebate to a core group customer by—

(a)crediting to the customer’s electricity account an amount as a result of which the amount (including Value Added Tax) charged to the customer is reduced by the amount of the prescribed rebate;

[^F60 (aa)following a request by the customer, crediting to the customer’s gas account an amount as a result of which the amount (including Value Added Tax) charged to the customer is reduced by the amount of the prescribed rebate;^F60]

(b)^F61tendering payment of the amount of the prescribed rebate to the customer; ...

(c)providing a customer who pre-pays for electricity with credit in the amount of the prescribed rebate against the cost (including Value Added Tax) of future electricity use; [^F62or^F62]

[^F63 (d)following a request by the customer, providing a customer who pre-pays for gas with credit in the amount of the prescribed rebate against the cost (including Value Added Tax) of future gas use.^F63]

(4) The date on which the prescribed rebate is provided to a core group customer is the date on which the scheme electricity supplier complies with paragraph (3).

(5) A scheme electricity supplier which provides the prescribed rebate to a core group customer must—

(a)specify on the customer’s bill; or

(b)otherwise notify the customer in writing,

that the customer has been given a rebate under the Warm Home Discount scheme.

(6) If a notice under regulation 6(1) is given to a scheme electricity supplier on or before 1st March in a scheme year, the scheme electricity supplier must provide the prescribed rebate to the core group customers specified in the notice by 31st March in that scheme year.

(7) If a notice is given after 1st March in a scheme year—

(a)the scheme electricity supplier must provide the prescribed rebate to the core group customers specified in the notice within 30 days; and

(b)the prescribed rebate is to be treated as being provided in the scheme year in which the notice is given.

Exceptions_I8

8. If the Secretary of State is satisfied that there are circumstances in which it would not be reasonably practicable for scheme electricity suppliers to provide the prescribed rebate to core group customers, the Secretary of State may determine that regulation 7 does not apply in those circumstances.

Provision of information by suppliers_I9

9.—(1) Subject to paragraphs (2) and (3), the Secretary of State may direct scheme electricity suppliers to provide information to the Secretary of State about their domestic customers for the purpose of facilitating the exercise of the power in regulation 6(1).

(2) If a direction is given, it—

(a)must be given to all scheme electricity suppliers[^F64 , except for any scheme electricity supplier to whom information may not be disclosed under section 36(1) of the Digital Economy Act 2017^F64] ;

(b)must specify the information to be provided;

(c)may specify a date on which, or by which, the information is to be provided;

(d)may specify the form in which the information is to be provided.

[^F65 (3) A direction may only be given to a scheme electricity supplier if—

(a)regulations are in force under section 142 of the Pensions Act 2008 and those regulations authorise the scheme electricity supplier to disclose to the Secretary of State the information specified in the direction; or

(b)the scheme electricity supplier is authorised by section 37 of the Digital Economy Act 2017 to disclose to the Secretary of State the information specified in the direction.^F65]

(4) A scheme electricity supplier must comply with a direction under paragraph (1).

(5) If a notice given to a scheme electricity supplier under regulation 6(1) specifies a person who is not a core group customer, or whom the supplier is unable to identify as a core group customer, the supplier must notify the Secretary of State within 30 days after receiving the notice.

(6) If, in relation to a scheme year, a scheme electricity supplier does not provide the prescribed rebate to one or more core group customers, the supplier must notify the Authority of—

(a)the number of core group customers to whom the supplier has not provided the prescribed rebate;

(b)the reasons why the supplier has not provided the prescribed rebate to those persons; and

(c)any steps taken by the supplier to attempt to provide the prescribed rebate to those persons.

[^F66 (7) For [^F67 scheme years 6 to 11^F67] , a scheme electricity supplier must, within the period specified in paragraph (8), notify the Authority of the number of prescribed rebates provided, or treated as being provided, by the supplier under this Part in the scheme year which are undelivered as at the date of the notification.

(8) The period specified for the purposes of paragraph (7) is—

(a)for scheme year 6, the period beginning on 1st July 2017 and ending on 30th September 2017;

(b)for scheme year 7, the period beginning on 1st April 2018 and ending on 31st August 2018.^F66]

[^F68 (c)for each subsequent scheme year, the period following the end of the scheme year beginning on 1st April and ending on 31st August.^F68]

Provision of information by the Secretary of State_I10

10. The Secretary of State must, in respect of each scheme electricity supplier, notify the Authority as soon as reasonably practicable after the end of each scheme year of—

(a)the number of persons specified in notices given to that supplier under regulation 6(1) during the scheme year; and

(b)the number of those persons in respect of which the supplier has given a notification under regulation 9(5).

Part 3: Interpretation_I11

11. References in this Part to the Secretary of State, [^F69except the second and third references in regulation 6(2B), the references in regulation 8^F69] and the first reference in regulation 9(1), include a person providing services to the Secretary of State.

PART 4 Non-core spending

CHAPTER 1 General

Determination and notification of non-core spending obligation_I12

12.—(1) The Secretary of State must—

(a)^F70for scheme year 1, by 7 days after the commencement date, ...

(b)for scheme years 2, [^F713, [^F72 4, 7, 9 and 10^F72,F71]] , by 14th February preceding the start of the scheme year,

[^F73 (c)for scheme year 5, by 7 days after the second commencement date,^F73]

[^F74 (d)for scheme year 6, by 7 days after the third commencement date,^F74]

[^F75 (e)for scheme year 8, on or before the 7th day after the fourth commencement date,^F75]

[^F76 (f)for scheme year 11, on or before the 7th day after the fifth commencement date,^F76]

determine and notify to the Authority the aggregate non-core spending obligation.

(2) Schedule 1 makes provision about the determination of the aggregate non-core spending obligation.

(3) The Authority must—

(a)for scheme year 1, by 28 days after the commencement date, and

(b)for scheme years 2, 3 and 4, by 14th March preceding the start of the scheme year,

calculate for each compulsory scheme electricity supplier, and notify to that supplier, the amounts specified in paragraph (4).

(4) The amounts are—

(a)the supplier’s non-core spending obligation (subject to any later adjustment under regulation 14); and

(b)the maximum amounts of spending which the supplier may count towards meeting its non-core spending obligation under—

(i)Chapter 3 (legacy spending);

(ii)Chapter 4 (industry initiatives); and

(iii)Chapters 3 and 4 combined.

[^F77 (5) For scheme year 5 the Authority must, by 28 days after the second commencement date, calculate for each compulsory scheme electricity supplier, and notify to that supplier, the following amounts—

(a)the supplier’s non-core spending obligation (subject to any later adjustment under regulation 14);

(b)the amount of spending which the supplier must aim to make under Chapter 2 (the broader group); and

(c)the maximum amount of spending which the supplier may count towards meeting its non-core spending obligation under Chapter 4 (subject to any determination by the Authority under regulation 15(3A)(b)(ii)).^F77]

[^F78 (6) The Authority must—

(a)for scheme year 6, by 28 days after the third commencement date, ^F79...

(b)for scheme year 7, by 14th March 2017,

[^F80 (c)for scheme year 8, on or before the 20th working day after the fourth commencement date,

(d)for scheme year 9, by 14th March 2019, ^F81...

(e)for scheme year 10, by 14th March 2020,^F80] [^F82 and^F82]

[^F83 (f)for scheme year 11, on or before the 20th working day after the fifth commencement date,^F83]

calculate for each compulsory scheme electricity supplier, and notify to that supplier, the amounts specified in paragraph (7).

(7) The amounts specified for the purposes of paragraph (6) are—

(a)the supplier’s non-core spending obligation (subject to any later adjustment under regulation 14);

[^F84 (b)for a scheme year in which the aggregate non-core spending obligation exceeds £50 million, the amount of spending which the supplier is required to make under Chapter 2; and^F84]

(c)the maximum amount of spending which the supplier may count towards meeting its non-core spending obligation under Chapters 4 and 5 combined (subject to any determination by the Authority under regulation 15(3A)(ba)(ii) [^F85 or 15B(3)(b)^F85] ).^F78]

Calculation of non-core spending obligation_I13

13.—(1) The non-core spending obligation of a compulsory scheme electricity supplier for a scheme year (subject to [^F86paragraphs (5) to (7) and^F86] any adjustment under regulation 14) is the relevant percentage of the aggregate non-core spending obligation for that scheme year.

(2) The relevant percentage, in relation to a compulsory scheme electricity supplier (“ C ”) and a scheme year, is % where—

(a)X is C’s number of domestic customers, unless sub-paragraph (b) or (c) applies;

(b)if C is connected to one or more scheme gas suppliers but not to any other compulsory scheme electricity suppliers, X is the combined number of domestic customers of C and its connected scheme gas suppliers;

(c)if C is connected to one or more scheme gas suppliers and to one or more other compulsory scheme electricity suppliers, X is a number equal to Z% of the combined number of domestic customers of C and its connected scheme gas suppliers and connected compulsory scheme electricity suppliers; and

(d)Y is the total number of domestic customers of all—

(i)compulsory scheme electricity suppliers; and

(ii)scheme gas suppliers which are connected to a compulsory scheme electricity supplier.

(3) In paragraph (2)(c), “Z%” is C’s number of domestic customers as a percentage of the combined number of domestic customers of C and its connected compulsory scheme electricity suppliers.

(4) In paragraphs (2) and (3)—

(a)references to a supplier’s number of domestic customers are to the supplier’s number of domestic customers on the 31st December preceding the start of the scheme year; and

(b)a supplier is to be treated as connected to another supplier if those suppliers were connected on the 31st December preceding the start of the scheme year (but not otherwise).

[^F87 (5) For [^F88 scheme years 5 to 11^F88] , paragraph (6) applies if the Secretary of State has reduced or increased the overall spending target [^F89 for the scheme year^F89] under paragraph 5, or paragraph 6 (as applicable), of Schedule 1.

(6) Where this paragraph applies, C’s non-core spending obligation (subject to any adjustment under regulation 14) is—

(a)A – B, if the overall spending target has been reduced under paragraph 5 of Schedule 1 [^F90 and C was a compulsory scheme electricity supplier in the preceding scheme year^F90] ;

(b)A + B, if the overall spending target has been increased under paragraph 6 of Schedule 1 [^F91 and C was a compulsory scheme electricity supplier in the preceding scheme year^F91] ;

[^F92 (c)A, if C was not a compulsory scheme electricity supplier in the preceding scheme year.^F92]

[^F93 (7) In paragraph (6)—

(a)A is C’s relevant percentage for the scheme year of the amount which would have been the aggregate non-core spending obligation for that scheme year if the overall spending target had not been reduced or increased under paragraph 5, or paragraph 6 (as applicable), of Schedule 1;

(b)B is C’s relevant percentage, as determined under paragraph (2) for the preceding scheme year, of the amount by which the overall spending target has been reduced or increased under paragraph 5, or paragraph 6 (as applicable), of Schedule 1.^F93,F87]]

Adjustments for banking and borrowing_I14

14. —(1) In [^F94 scheme years 2 to 11 ^F94] , if the amount of spending incurred under this Part (as determined by the Authority in accordance with regulation 29(d)) by a compulsory scheme electricity supplier in the preceding scheme year (“D _t-1 ”) is greater or less than the supplier’s non-core spending obligation for the preceding scheme year (“S _t-1 ”), the Authority must adjust the supplier’s non-core spending obligation for the current scheme year (“ S ”) in accordance with paragraphs (2) and (3).

(2) If D_t-1 is less than S_t-1, S is to be adjusted by adding (S_t-1 – D_t-1).

(3) If D_t-1 is greater than S_t-1, S is to be adjusted by subtracting—

(a)(D_t-1 – S_t-1), unless sub-paragraph (b) applies ; or

[^F95 (b)in relation to—

(i)scheme years 2 and 3, 1% of S_t-1, if the amount determined under sub-paragraph (a) is greater than 1% of S_t-1; ^F96...

(ii)scheme year 4, 34% of S_t-1, if the amount determined under sub-paragraph (a) is greater than 34% of S_t-1;

[^F97 (iii)[^F98 subsequent scheme years^F98] , 5% of S_t-1, if the amount determined under sub-paragraph (a) is greater than 5% of S_t-1.^F97,F95]]

[^F99 (3A) For [^F100 scheme years 6 to 11^F100] , a compulsory scheme electricity supplier must, within the period specified in paragraph (3B), notify the Authority of the number of prescribed rebates provided by the supplier under Chapter 2 in the scheme year which are undelivered as at the date of the notification.

(3B) The period specified for the purposes of paragraph (3A) is—

(a)for scheme year 6, the period beginning on 1st July 2017 and ending on 30th September 2017;

(b)for scheme year 7, the period beginning on 1st April 2018 and ending on 31st August 2018;

[^F101 (c)for each subsequent scheme year, the period following the end of the scheme year beginning on 1st April and ending on 31st August.^F101]

[^F102 (3C) In scheme years 7 to 11, whether or not an adjustment is also made under paragraph (1), the Authority must adjust each supplier’s non-core spending obligation by adding F, where F is £140 multiplied by the sum of—

(a)where the supplier has made a notification under regulation 9(7) in respect of the preceding scheme year, the number of prescribed rebates as stated in that notification; and

(b)where the supplier has made a notification under paragraph (3A) in respect of the preceding scheme year, the number of prescribed rebates as stated in that notification.^F102,F99]]

(4) The Authority must notify each compulsory scheme electricity supplier by 30th September in scheme years 2, 3 [^F103, 4 and 5^F103][^F104 and by 31st October in [^F105 scheme years 7, 9 and 10^F105,F104]] —

(a)whether any adjustment has been made under this regulation to its non-core spending obligation for that scheme year; and

(b)if so, the adjusted amount of the supplier’s non-core spending obligation.

[^F106 (5) In scheme year 6, the Authority must notify each compulsory scheme electricity supplier of the matters referred to sub-paragraphs (a) and (b) of paragraph (4) by 30th September 2016, or by 2 months after the third commencement date, whichever is the later. ^F106]

[^F107 (6) In scheme year 8, the Authority must notify each compulsory scheme electricity supplier of the matters referred to in sub-paragraphs (a) and (b) of paragraph (4) by 30th September 2018, or within 2 months of the fourth commencement date, whichever is the later.^F107]

[^F108 (7) In scheme year 11, the Authority must notify each compulsory scheme electricity supplier of the matters referred to in sub-paragraphs (a) and (b) of paragraph (4) by 30th September 2021, or within two months of the fifth commencement date, whichever is the later.^F108]

Types and amounts of spending [^F109in scheme years 1 to 7^F109] _I15

15.—(1) In [^F110each of scheme years 1 to 7^F110] a compulsory scheme electricity supplier must, subject to paragraph (2), incur spending under this Part to the amount of its non-core spending obligation.

(2) In relation to scheme year 1, 2 or 3, a compulsory scheme electricity supplier is not in breach of paragraph (1) if the amount of spending incurred by the supplier under this Part (as determined by the Authority in accordance with regulation 29(d)) is equal to or greater than 99% of its non-core spending obligation.

(3) The spending to be incurred by a compulsory scheme electricity supplier under this Part—

(a)must, in [^F111each of scheme years 1 to 7^F111] , include the provision of rebates to broader group customers under Chapter 2 [^F112and in scheme [^F113 years 5, 6 and 7^F113] must, where reasonably practicable, be no less than the amount notified to the supplier under regulation 12(5)(b)^F112][^F114 or (7)(b) for the scheme year^F114] ;

(b)^F115if the supplier is a relevant supplier, may in scheme years 1, 2 and 3 include legacy spending under Chapter 3, subject to the limits in paragraph (4)(a) and (c); ...

(c)[^F116 in scheme years 1 to 5,^F116] may include spending on industry initiatives under Chapter 4, subject to the limits in paragraph (4)(b) and (c); [^F117and^F117]

[^F118 (d)in scheme years 6 and 7, may include spending on industry initiatives under Chapter 4 and on specified activities under Chapter 5, subject to the limits in paragraphs (4)(d) and (4B).^F118]

[^F119 (3A) In scheme [^F120 years 5, 6 and 7^F120] —

[^F121 (a)a compulsory scheme electricity supplier must notify the Authority by 15th December in the scheme year if it considers that it will not incur at least the amount of spending notified to the supplier under regulation 12(5)(b) or (7)(b) for the scheme year;^F121]

(b)[^F122 in scheme year 5,^F122] the Authority must, within 28 days of receiving such a notification—

(i)determine whether, and if so the extent to which, the supplier may incur spending below that amount;

(ii)where the Authority determines that the supplier may incur spending below that amount, determine the amount by which the supplier must increase its spending under Chapter 4; and

(iii)notify the supplier accordingly; ^F123...

[^F124 (ba)in scheme years 6 and 7, the Authority must, within 28 days of receiving such a notification—

(i)determine whether, and if so the extent to which, the supplier may incur spending below that amount;

(ii)where the Authority determines that the supplier may incur spending below that amount, determine the amount by which the supplier must increase its spending under Chapters 4 or 5; and

(iii)notify the supplier accordingly; and^F124]

(c)a supplier must comply with a determination notified to it under [^F125 sub-paragraphs (b)(iii) or (ba)(iii)^F125] .^F119]

(4) The maximum amount of spending that a compulsory scheme electricity supplier may count towards its non-core spending obligation—

(a)under Chapter 3, is the relevant percentage of—

(i)£140 million in scheme year 1;

(ii)£70 million in scheme year 2; and

(iii)£35 million in scheme year 3;

[^F126 (b)under Chapter 4—

(i)in scheme years 1 to 4, is the relevant percentage of £30 million; and

(ii)in scheme year 5, is the relevant percentage of £30 million, unless the Authority has notified the supplier under paragraph (3A)(b)(iii) that spending in excess of that amount is necessary to meet the supplier’s non-core spending obligation; ^F127...^F126]

(c)under Chapters 3 and 4 combined, is the relevant percentage of—

(i)£150 million in scheme year 1;

(ii)£85 million in scheme year 2; and

(iii)£53 million in scheme year 3; [^F128and^F128]

[^F129 (d)under Chapters 4 and 5 combined, in scheme years 6 and 7, is the relevant percentage of £30 million, unless the Authority has notified the supplier under paragraph (3A)(ba)(iii) that spending in excess of that amount is necessary to meet the supplier’s non-core spending obligation.^F129]

[^F130 (4A) In scheme [^F131 years 5, 6 and 7^F131] , the amount of spending that a compulsory scheme electricity supplier must aim to make under Chapter 2 is the relevant percentage of the amount calculated by subtracting £30 million from the aggregate non-core spending obligation.^F130]

[^F132 (4B) The maximum amount of spending under Chapter 4 on debt write-off that a compulsory scheme electricity supplier may count towards its non-core spending obligation is the relevant percentage of—

(a)£15 million in scheme year 6; and

(b)£12 million in scheme year 7.^F132]

(5) In [^F133 paragraphs (4) to (4B) ^F133] , “ the relevant percentage ” means the percentage determined under regulation 13(2).

[^F134 (6) In paragraph (4B), “debt write-off” means the provision of assistance to reduce or cancel debts for household electricity or gas supply by means of reducing or cancelling the debts. ^F134]

[^F135Types and amounts of spending from scheme year 8

15A. —(1) This regulation applies to a scheme year commencing on or after the fourth commencement date (“a relevant scheme year”).

(2) In each relevant scheme year, a compulsory scheme electricity supplier must incur spending under this Part to the amount of its non-core spending obligation, and in doing so—

(a)may include spending on industry initiatives under Chapter 4 and on specified activities under Chapter 5, subject to the limits in paragraphs (3) to (5);

(b)in a scheme year in which the aggregate non-core spending obligation does not exceed £50 million, must not include spending under Chapter 2; and

(c)in a scheme year in which the aggregate non-core spending obligation exceeds £50 million, must include spending under Chapter 2, which must be of no less than the relevant percentage of the amount calculated by subtracting £40 million from the aggregate non-core spending obligation, unless the Authority has notified the supplier under regulation 15B(3)(c) that it may incur spending below that amount.

(3) In each relevant scheme year in which the aggregate non-core spending obligation exceeds £5 million, the maximum amount of spending under Chapter 4 on an activity of a kind listed in the final row of the table in Schedule 4 that a compulsory scheme electricity supplier may count towards its non-core spending obligation is the relevant percentage of £5 million.

(4) In each relevant scheme year in which the aggregate non-core spending obligation exceeds £50 million, the maximum amount of spending under Chapters 4 and 5 combined that a compulsory scheme electricity supplier may count towards its non-core spending obligation is the relevant percentage of £40 million, unless the Authority has notified the supplier under regulation 15B(3)(c) that it may spend in excess of that amount to meet it’s non-core spending obligation.

(5) Subject to paragraph (6), the maximum amount of spending under Chapter 4 on debt write-off that a compulsory scheme electricity supplier may count towards its non-core spending obligation is the relevant percentage of—

(a)£10 million in scheme year 8;

(b)£8 million in scheme year 9;

(c)£6 million in scheme year 10.

[^F136 (d)£6 million in scheme year 11.^F136]

(6) Paragraph (5) does not apply in a scheme year in which the aggregate non-core spending obligation is equal to, or less than—

(a)£10 million in scheme year 8;

(b)£8 million in scheme year 9;

(c)£6 million in scheme year 10.

[^F137 (d)£6 million in scheme year 11.^F137]

(7) In this regulation—

“debt write-off” has the same meaning as in regulation 15(6); and

“the relevant percentage” means the percentage determined under regulation 13(2).

Adjustment of types and amounts of spending from scheme year 8

15B.—(1) If an amount of spending is notified to a compulsory scheme electricity supplier under regulation 12(7)(b) for a relevant scheme year, the supplier must notify the Authority by 15th December in the scheme year if it considers that it will not incur at least that amount of spending under Chapter 2 for the scheme year.

(2) A notification under paragraph (1) must be in such form, and contain such information, as the Authority requires.

(3) The Authority must, within 20 working days of receiving a notification under paragraph (1)—

(a)determine whether it is not reasonably practicable for the supplier to incur spending under Chapter 2 to at least the amount notified to the supplier under regulation 12(7)(b);

(b)where the Authority determines that it is not reasonably practicable for the supplier to incur at least that amount of spending, determine—

(i)the extent to which the supplier may incur spending below that amount under Chapter 2; and

(ii)the maximum amount by which the supplier may increase its spending under Chapter 4 or 5; and

(c)notify the supplier accordingly.

(4) A supplier must comply with a determination notified to it under paragraph (3)(c).

(5) In this regulation, “relevant scheme year” has the same meaning as in regulation 15A(1). ^F135]

Spending by connected scheme suppliers_I16

16. —(1) Paragraph (2) applies if a compulsory scheme electricity supplier (“ C ”) is connected to one or more scheme gas suppliers, but is not connected to another compulsory scheme electricity supplier.

(2) C may treat the amount of any spending incurred under Chapter 3 or Chapter 4 by a connected scheme gas supplier as an amount of spending incurred by C.

(3) Paragraph (4) applies if C is connected to one or more scheme gas suppliers and to one or more compulsory scheme electricity suppliers.

(4) C may treat Z% of the amount of any spending incurred under Chapter 3 or Chapter 4 by a connected scheme gas supplier as an amount of spending incurred by C.

(5) In paragraph (4), “Z%” is C’s number of domestic customers as a percentage of the combined number of domestic customers of C and its connected compulsory scheme electricity suppliers.

Spending incurred before commencement date_I17

17.—(1) Paragraph (2) applies if these Regulations come into force after 1st April 2011.

(2) In scheme year 1, a compulsory scheme electricity supplier may treat as an amount of spending incurred under Chapter 3 or Chapter 4 any spending which—

(a)was incurred between 1st April 2011 and the commencement date; and

(b)would have counted towards its non-core spending obligation by virtue of Chapter 3 or Chapter 4, if these Regulations had come into force on 1st April 2011.

[^F138Scheme year 6 spending incurred before third commencement date

17A. In scheme year 6, a compulsory scheme electricity supplier may treat as an amount of spending incurred under Chapter 4 any spending which—

(a)was incurred in the period beginning on 1st April 2016 and ending on the day before the third commencement date, and

(b)would count towards its non-core spending obligation by virtue of Chapter 4 if the Warm Home Discount (Miscellaneous Amendments) Regulations 2016 had come into force on 1st April 2016.^F138]

[^F139Scheme year 8 spending before fourth commencement date

17B. In scheme year 8, a compulsory scheme electricity supplier may treat as an amount of spending incurred under Chapter 4 any spending which—

(a)takes place in the period beginning on 1st April 2018 and ending on the day before the fourth commencement date; and

(b)would count towards its non-core spending obligation by virtue of Chapter 4 if the Warm Home Discount (Miscellaneous Amendments) Regulations 2018 had come into force on 1st April 2018.^F139]

[^F140Scheme year 11 spending before fifth commencement date

17C. In scheme year 11, a compulsory scheme electricity supplier may treat as an amount of spending incurred under Chapter 4 any spending which—

(a)takes place in the period beginning on 1st April 2021 and ending on the day before the fifth commencement date; and

(b)would count towards its non-core spending obligation by virtue of Chapter 4 if the Warm Home Discount (Miscellaneous Amendments) Regulations 2021 had come into force on 1st April 2021.^F140]

CHAPTER 2 The broader group

Broader group customers_I18

18. —(1) A compulsory scheme electricity supplier must, in each scheme year[^F141 in which the aggregate non-core spending obligation exceeds £50 million ^F141] , provide the prescribed rebate to domestic customers selected by the supplier (“broader group customers”), who appear to the supplier to meet eligibility criteria determined by the supplier and approved by the Authority in accordance with this Chapter.

(2) Paragraph (1) does not require a compulsory scheme electricity supplier to provide the prescribed rebate to every domestic customer meeting its eligibility criteria.

(3) A compulsory scheme electricity supplier may not treat a rebate as being provided under this Chapter if it is provided to a core group customer pursuant to a notice under regulation 6.

Eligibility criteria and verification measures_I19

19.—(1) A compulsory scheme electricity supplier must determine, and notify to the Authority—

(a)eligibility criteria which the supplier proposes to apply in selecting broader group customers; and

(b) measures (“verification measures”) to be taken before providing the prescribed rebate to a broader group customer, for the purpose of verifying so far as reasonably practicable that the customer meets the supplier’s eligibility criteria.

(2) A supplier may make—

(a)a notification for the purposes of one or more scheme years; and

(b)more than one notification in respect of a scheme year.

(3) When the Authority receives a notification, it must decide whether to approve—

(a)the eligibility criteria; and

(b)the verification measures.

(4) The Authority must approve a supplier’s eligibility criteria if, but only if—

(a)they satisfy Condition 1; and

(b)in the case of eligibility criteria notified for the purposes of any of [^F142scheme years 2 to 11^F142] , they also satisfy Condition 2.

[^F143 (5) Condition 1 is that—

[^F144 (a)in the case of eligibility criteria notified for the purposes of any of [^F145 scheme years 2 to 8 and 11^F145] , the eligibility criteria include all the descriptions of persons in Part 1 of Schedule 2;

(aa)in the case of eligibility criteria notified for the purposes of any of scheme years 9 and 10, the Authority is satisfied that the eligibility criteria include all the descriptions of persons in Part 1 of Schedule 2 other than those persons meeting the criteria described in any relevant eligibility statement; and^F144]

(b)the Authority is satisfied that customers meeting any other criterion will wholly or mainly be persons in fuel poverty, or in a fuel poverty risk group.^F143]

(6) Condition 2 is that the criteria are such as to ensure that in [^F146scheme years 2 to 11^F146] , customers meeting the criteria will wholly or mainly be persons who were not core group customers in the previous scheme year.

(7) The Authority must approve a supplier’s proposed verification measures if, but only if—

(a)they include all the measures specified in Part 2 of Schedule 2; or

(b)the Authority is satisfied that the measures will be at least as effective as those specified in Part 2 of Schedule 2 for the purpose of verifying so far as reasonably practicable that customers provided with the prescribed rebate under this Chapter meet the supplier’s eligibility criteria.

[^F147 (8) In this regulation, “relevant eligibility statement” means an eligibility statement for the scheme year which has been consulted on and published by the Secretary of State before the start of the scheme year. ^F147]

Provision of rebate to broader group customers_I20

20.—(1) Where a compulsory scheme electricity supplier provides the prescribed rebate to a domestic customer, that rebate is only to be treated as being provided under this Chapter if—

(a)the supplier has notified eligibility criteria and verification measures to the Authority;

(b)either—

(i)the rebate is provided after the Authority has approved the eligibility criteria and verification measures; or

(ii)in [^F148scheme years 1, 6, 8 and 11^F148] , the rebate is provided before the Authority has decided whether to approve the eligibility criteria and verification measures, and the Authority subsequently approves them;

(c)the supplier applies its verification measures; and

(d)it appears to the supplier that the customer meets its eligibility criteria.

(2) A compulsory scheme electricity supplier must provide the prescribed rebate to a broader group customer by—

(a)crediting to the customer’s electricity account an amount as a result of which the amount (including Value Added Tax) charged to the customer is reduced by the amount of the prescribed rebate;

[^F149 (aa)following a request by the customer, crediting to the customer’s gas account an amount as a result of which the amount (including Value Added Tax) charged to the customer is reduced by the amount of the prescribed rebate;^F149]

(b)^F150tendering payment of the amount of the prescribed rebate to the customer; ...

(c)providing a customer who pre-pays for electricity with credit in the amount of the prescribed rebate against the cost (including Value Added Tax) of future electricity use; [^F151or^F151]

[^F152 (d)following a request by the customer, providing a customer who pre-pays for gas with credit in the amount of the prescribed rebate against the cost (including Value Added Tax) of future gas use.^F152]

(3) The date on which a compulsory scheme electricity supplier provides the prescribed rebate to a customer is the date on which the supplier complies with paragraph (2).

(4) Where a compulsory scheme electricity supplier provides the prescribed rebate to a domestic customer under this Chapter, it must—

(a)specify on the customer’s bill; or

(b)otherwise notify the customer in writing,

that the customer has been given a rebate under the Warm Home Discount scheme.

CHAPTER 3 Legacy spending

[^F153Scope of Chapter 3

21ZA. This Chapter does not apply in scheme years [^F154 commencing on or after the third commencement date^F154] .^F153]

Legacy spending_I21

21.—(1) Subject to regulation 15(4) and to paragraph (3), a compulsory scheme electricity supplier which is a relevant supplier may count towards its non-core spending obligation for a scheme year—

(a)the amount of any legacy spending incurred by the compulsory scheme electricity supplier in the scheme year; and

(b)if the compulsory scheme electricity supplier is connected to a scheme gas supplier which is a relevant supplier, the amount of any legacy spending incurred by the scheme gas supplier, to the extent permitted by regulation 16.

(2) The amount of legacy spending incurred by a relevant supplier in a scheme year is the sum of—

(a)the amount (excluding Value Added Tax) of relevant benefits in the form of rebates; and

(b)the value of relevant benefits in the form of discounted tariffs (excluding any reduction in the amount of Value Added Tax paid by eligible customers as a result of the provision of those tariffs),

provided to eligible customers by that supplier in the scheme year.

(3) A compulsory scheme electricity supplier may not in any scheme year count towards its non-core spending obligation the amount or value of relevant benefits provided to a number of eligible customers exceeding the number specified in paragraph (4).

(4) The number referred to in paragraph (3) is the number of eligible customers who were provided with a financial benefit in the period 1st April 2010 to 31st March 2011 under a voluntary commitment by—

(a)the compulsory scheme electricity supplier; or

(b)a connected scheme gas supplier.

Provision of rebates_I22

22.—(1) A rebate to an eligible customer under this Chapter must be provided by—

(a)crediting the rebate to the customer’s account;

(b)tendering payment to the customer; or

(c)providing a customer who pre-pays for a fuel type with credit against future use of that fuel type.

(2) The date on which a relevant supplier provides a rebate to an eligible customer is the date on which the supplier complies with paragraph (1).

Reference tariffs_I23

23.—(1) For each scheme year the Authority must, in relation to each relevant supplier, for each combination of—

(a)fuel type supplied by the supplier; and

(b)payment method accepted by the supplier,

designate a tariff offered by the supplier as a reference tariff for the purpose of determining the value of discounted tariffs provided by the supplier.

(2) In designating a tariff as a reference tariff, the Authority must take account of the desirability of a reference tariff meeting as many as possible of the criteria specified in paragraph (3).

(3) The criteria referred to in paragraph (2) are that the tariff—

(a)is available to all domestic customers;

(b)is an enduring tariff; and

(c)is not offered with an incentive (such as cashback, or discounts on other products).

(4) The Authority must consult a relevant supplier before designating a tariff offered by that supplier as a reference tariff.

(5) In paragraph (3)(b), “ enduring tariff ” means a tariff which—

(a)has been continuously available to new customers for a period of not less than one year; or

(b)the Authority is satisfied that the supplier intends to make continuously available to new customers for a period of not less than one year.

Calculation of legacy spending_I24

24.—(1) Each relevant supplier must provide to the Authority, within 8 weeks after the commencement date, details of—

(a)the criteria which the supplier applied in the period from 1st April 2010 to 31st March 2011 to determine eligibility of domestic customers for relevant benefits provided by the supplier under its voluntary commitment; and

(b)the number of domestic customers to whom the supplier provided a relevant benefit in the period from 1st April 2010 to 31st March 2011 under its voluntary commitment.

(2) Each relevant supplier must provide to the Authority, within 8 weeks after the end of each scheme year, the information specified in Part 1 of Schedule 3.

(3) The Authority may extend the time limits in paragraphs (1) and (2).

(4) Part 2 of Schedule 3 specifies the method to be used by the Authority to determine, under regulation 29, the amount of legacy spending incurred by a relevant supplier under this Chapter through the provision of discounted tariffs.

(5) Paragraphs (1) and (2) are without prejudice to the Authority’s power to request information under regulation 30.

Chapter 3: Interpretation_I25

25. In this Chapter, and in Schedule 3—

“ discounted tariff ” means a relevant supplier’s tariff for the supply of a fuel type to domestic customers paying by a particular payment method, which is cheaper than that supplier’s reference tariff for the supply of that fuel type with that payment method;

“ eligible customer ”, in relation to a relevant supplier, means a domestic customer appearing to the supplier to meet criteria which were applied by the supplier in the period from 1st April 2010 to 31st March 2011 to determine eligibility for a financial benefit provided by the supplier under a voluntary commitment;

“ fuel type ” means—

“ payment method ” means—

“ reference tariff ” means a tariff designated by the Authority under regulation 23(1);

“ relevant benefit ” means—

“ standard credit ” means a payment method whereby payment—

CHAPTER 4 Industry initiatives

Industry initiatives_I26

26. —(1) Subject to regulation 15(4) [^F155 and (4B) ^F155] and to paragraphs (2) and (3), a compulsory scheme electricity supplier may in respect of [^F156 any of scheme years 1 to 7 ^F156] count towards its non-core spending obligation spending (excluding Value Added Tax) incurred in that scheme year on an activity of a kind listed in the first column of the table in Schedule 4 (an “industry initiative”) by—

(a)that supplier; or

(b)any connected scheme gas supplier, to the extent permitted by regulation 16.

[^F157 (1A) Subject to regulation 15A(3) to (5), and to paragraphs (2) and (4), a compulsory scheme electricity supplier may in respect of any of [^F158 scheme years 8 to 11^F158] count towards its non-core spending obligation spending (excluding Value Added Tax) taking place in that scheme year on an industry initiative by—

(a)that supplier; or

(b)any connected scheme gas supplier, to the extent permitted by regulation 16.^F157]

(2) Spending on industry initiatives may not count towards a compulsory scheme electricity supplier’s non-core spending obligation if it—

(a)is incurred pursuant to a requirement in any other enactment, or in an electricity supply or gas supply licence;

(b)is counted by a scheme supplier towards a spending obligation or target imposed by any other enactment, or by an electricity supply or gas supply licence; or

(c)falls within an exception in the second column of the table in Schedule 4.

(3) Paragraph (1) only applies in relation to spending on an industry initiative if—

(a)the industry initiative has been notified to the Authority under regulation 27; and

(b)either—

(i)the spending is incurred after the Authority has approved the industry initiative; or

(ii)in scheme [^F159years 1 and 6^F159] , the spending is incurred before the Authority has decided whether to approve the industry initiative, and the Authority subsequently approves it.

[^F160 (4) Paragraph (1A) only applies in relation to spending on an industry initiative if—

(a)the industry initiative has been notified to the Authority under regulation 27; and

(b)either—

(i)the spending takes place after the Authority has approved the industry initiative; or

(ii)in [^F161 scheme years 8 and 11^F161] , the spending takes place before the Authority has decided whether to approve the industry initiative, and the Authority subsequently approves it.^F160]

Approval of industry initiatives_I27

27.—(1) A compulsory scheme electricity supplier that wishes to count spending on industry initiatives towards its non-core spending obligation must notify the Authority of the industry initiatives which it, or any connected scheme gas supplier, proposes to carry out.

(2) A supplier may make—

(a)a notification for the purposes of one scheme year, or for the purposes of more than one scheme year; and

(b)more than one notification in respect of a scheme year.

(3) The Authority must approve a supplier’s notification if, but only if, it is satisfied that the supplier’s proposed industry initiatives—

(a)meet the criteria specified in an entry in the first column of the table in Schedule 4, and do not fall within an exception specified in a corresponding entry in the second column of the table;

[^F162 (aa)ensure, so far as reasonably practicable, that every domestic consumer provided with benefits under the initiatives will be provided with energy advice [^F163 and smart meter advice^F163] ;^F162]

(b)include adequate measures to ensure, so far as reasonably practicable, that benefits provided under the initiatives are provided wholly or mainly to persons in fuel poverty or in a fuel poverty risk group; and

(c)will provide value for money.

[^F164CHAPTER 5 Specified Activities

Activities specified by the Secretary of State

27A. —(1) Subject to [^F165 regulations 15(4) and 15A(4) ^F165] and paragraphs (3) and (4), a compulsory scheme electricity supplier may, in respect of [^F166 scheme years 6 to 11 ^F166] , count towards its non-core spending obligation financial contributions (excluding Value Added Tax) made by the supplier in the scheme year to fund an activity specified in a notice published by the Secretary of State in accordance with paragraph (2) (a “specified activity”).

(2) The Secretary of State may publish a notice specifying an activity for the purposes of paragraph (1) where the Secretary of State is satisfied that—

(a)the funding of the activity is open to contributions from any compulsory scheme electricity supplier;

(b)the activity is of a kind listed in the first column of the table in Schedule 4 and does not fall within an exception in the second column of the table;

(c)the activity includes adequate measures to ensure, so far as reasonably practicable, that—

(i)every domestic consumer provided with benefits under the activity will be provided with energy advice [^F167 and smart meter advice^F167] ; and

(ii)benefits under the activity will be provided wholly or mainly to persons in fuel poverty or in a fuel poverty risk group; and

(d)the activity will provide value for money.

(3) Financial contributions made to fund a specified activity may not count towards a compulsory scheme electricity supplier’s non-core spending obligation if the financial contribution—

(a)is made pursuant to a requirement in any other enactment, or in an electricity supply licence or gas supply licence; or

(b)is counted by a scheme supplier towards a spending obligation or target imposed by any other enactment, or by an electricity supply or gas supply licence.

(4) Paragraph (1) only applies in relation to financial contributions made to fund a specified activity if the financial contribution is made after the Secretary of State has published the notice specifying the activity for the purposes of paragraph (1).^F164]

PART 5 Supplementary

Approvals by the Authority: procedure_I28

28.—(1) This regulation applies to notifications to the Authority under regulation 19 or regulation 27.

(2) A notification must be in such form, and contain such information, as the Authority requires.

(3) The Authority must, within the period specified in paragraph (4)—

(a)notify the supplier of its decision; or

(b)if the Authority requires further information from the supplier before determining the notification, request that information from the supplier.

(4) The period referred to in paragraph (3) is—

(a)[^F168 20 working days^F168] after receipt of the notification, except where sub-paragraph (b) applies;

(b)12 weeks after the commencement date, if the notification is received by the Authority within 8 weeks after the commencement date.

(5) When a supplier replies to a request for further information, the Authority must within [^F16920 working days^F169] after receiving the reply—

(a)notify the supplier of its decision; or

(b)if the Authority still requires further information before determining the notification, request that information from the supplier.

(6) If the Authority refuses to approve a supplier’s notification, or part of a notification, the Authority must give reasons for its refusal.

Determination of amounts spent by scheme suppliers_I29

29.—(1) The Authority must, in respect of each scheme year, determine as soon as reasonably practicable after the end of the scheme year—

(a)the total amount of rebates provided in the scheme year, or treated as being provided in the scheme year, by each scheme electricity supplier under Part 3;

(b)the total amount of rebates provided in the scheme year by each compulsory scheme electricity supplier under Chapter 2 of Part 4; and

(c)the total amounts of—

(i)^F170legacy spending under Chapter 3 of Part 4; ...

(ii)spending on industry initiatives under Chapter 4 of Part 4, [^F171and^F171]

[^F172 (iii)for [^F173 scheme years 6 to 11^F173] , spending on specified activities under Chapter 5 of Part 4,^F172]

incurred by, or treated as being incurred by, each compulsory scheme electricity supplier which that supplier may count towards its non-core spending obligation for the scheme year; and

(d)the total amount of spending incurred by, or treated as being incurred by, each compulsory scheme electricity supplier (being the sum of the amounts determined for that supplier under sub-paragraphs (b) and (c)) which that supplier may count towards its non-core spending obligation for the scheme year.

Provision of information to the Authority_I30

30.—(1) The Authority may request from a scheme supplier such information as the Authority requires for the purpose of carrying out any of its functions in relation to the Warm Home Discount scheme.

(2) A request under paragraph (1) may specify—

(a)the date by which the information is to be provided; and

(b)the form in which the information is to be provided.

(3) A scheme supplier must comply with a request under paragraph (1).

[^F174Provision of information by the Authority

30A.—(1) If the Authority is notified by a supplier of last resort of that supplier’s intention to meet all or part of a failed supplier’s non-core spending obligation for a scheme year and the notification is made on or before 15th February in that scheme year, the Authority must inform the Secretary of State as soon as reasonably practicable after being so notified.

(2) In this regulation—

“failed supplier” means a person in respect of whose domestic customers the Authority has given a last resort supply direction;

“last resort supply direction” means a direction given by the Authority to a licensed electricity supplier to take over responsibility for the supply of electricity to domestic customers of a failed supplier;

“supplier of last resort” means a compulsory scheme electricity supplier which has been given a last resort supply direction. ^F174]

[^F175Reviews of the scheme

31. The Secretary of State must conduct a review—

(a)of the scheme, if the Secretary of State is satisfied that a review would be desirable because—

(i)the Scottish Ministers have consulted, or are consulting, the Secretary of State in accordance with section 14A(5)(a) of the Energy Act 2010 (consultation on proposed regulations under section 9 of the Energy Act 2010); or

(ii)there has been a significant change in circumstances since the fourth commencement date;

(b)of the amount of the prescribed rebate, if the Secretary of State is satisfied that a review would be desirable because there has been a significant change in the gas or electricity costs incurred by persons in fuel poverty or in a fuel poverty risk group;

(c)of regulation 5 (scheme suppliers), if the Secretary of State is satisfied that a review would be desirable in order to promote effective competition between suppliers or to protect the interests of domestic customers;

(d)of Part 4 (non-core spending), if the Secretary of State is satisfied that a review would be desirable because the Secretary of State has proposed a significant increase to the number of persons to whom suppliers must provide the prescribed rebate under Part 3 (the core group);

(e)of any aspect of the operation of the scheme, if the Secretary of State is satisfied that a review would be desirable—

(i)in order for the scheme to achieve greater reductions in fuel poverty; or

(ii)because that aspect of the scheme is not, or may not be, operating effectively or its effectiveness could be improved.^F175]

Regulation 12(2)

SCHEDULE 1 Aggregate non-core spending obligation

Determination of aggregate non-core spending obligation_{I31,I32,I33,I34,I35,I36,I37,I38,I39}

1. Before determining the amount of the aggregate non-core spending obligation for a scheme year, the Secretary of State must estimate the aggregate amount of benefits (if any) to be provided by scheme suppliers under Part 3 in that scheme year (“the core group spending estimate”).

2. The amount of the aggregate non-core spending obligation for a scheme year (“year t”) is to be T – E where—

• T is the overall spending target for year t; and

• E is the core group spending estimate for year t.

3. The overall spending target is—

(a) £250 million for scheme year 1; and

(b) subject to any adjustments under paragraphs 4 to 6, £275 million for scheme year 2;

(c) subject to any adjustments under paragraphs 4 to 9—

(i)^F176 £300 million for scheme year 3; ...

(ii) £310 million for scheme year 4;

[^F177 (iii) £320 million for scheme year 5;^F177]

[^F178 (iv) £323 million for scheme year 6;

(v) £329 million for scheme year 7.^F178]

[^F179 (vi) £340 million for scheme year 8;

(vii) for scheme year 9, £340 million increased or, as the case may be, decreased by the percentage increase or decrease in the consumer prices index over the 9 month period ending with 31st December 2018 (the resulting figure being rounded to the nearest million pounds sterling, with half a million being rounded upwards);

(viii) for scheme year 10, £340 million increased or, as the case may be, decreased by the percentage increase or decrease in the consumer prices index over the 21 month period ending with 31st December 2019 (the resulting figure being rounded to the nearest million pounds sterling, with half a million being rounded upwards).^F179]

[^F180 (ix) £354 million for scheme year 11.^F180]

4. Before determining the amount of the aggregate non-core spending obligation for [^F181 any of [^F182 scheme years 2 to 11 ^F182,F181]] , (“year t”), the Secretary of State must—

(a) review the core group spending estimate for year t-1; and

(b) increase or reduce that estimate, if it appears to the Secretary of State that the aggregate amount of benefits provided under Part 3 in year t-1 will be greater or less than the estimate.

5. If the Secretary of State increases the core group spending estimate for year t-1, the overall spending target for year t is to be reduced by a corresponding amount.

6. If the Secretary of State reduces the core group spending estimate for year t-1, the Secretary of State may increase the overall spending target for year t by an amount not exceeding the amount of that reduction.

7. Before determining the amount of the obligation for [^F183 any of [^F184 scheme years 3 to 11 ^F184,F183]] (“year t”), the Secretary of State must (in addition to the steps in paragraph 4 to 6) calculate the difference between—

(a) the aggregate amount of benefits provided under Part 3 in year t-2 (“A _t-2 ”); and

(b) the core group spending estimate (with any increase or reduction previously made to it) for year t-2 (“E _t-2 ”).

8. If A_t-2 is greater than E_t-2, the overall spending target for year t is to be reduced by an amount corresponding to the difference between A_t-2 and E_t-2.

9. If A_t-2 is less than E_t-2, the Secretary of State may increase the overall spending target for year t by an amount not exceeding the difference between A_t-2 and E_t-2.

Interpretation_I40

10. In this Schedule—

[^F185 “consumer prices index” means—

“ year t-1 ” means the scheme year preceding the scheme year for which the amount of the obligation is being determined; and

“ year t-2 ” means the scheme year before year t-1.

Regulation 19(5) and (7)

SCHEDULE 2 Broader group

PART 1 Eligibility criteria: descriptions of persons satisfying Condition 1 _I41,I42,I43

1. A person who is in receipt of income support and—

(a) has parental responsibility for a child under the age of 5 who ordinarily resides with that person; or

(b) is in receipt of a qualifying component.

^F1862. A person who is in receipt of income-related employment and support allowance which includes a ... support component and—

(a) has parental responsibility for a child under the age of 5 who ordinarily resides with that person; or

(b) is in receipt of a qualifying component.

[^F187 2A. A person who is in receipt of income-related employment and support allowance and who is a member of the work-related activity group and—

(a) has parental responsibility for a child under the age of 5 who ordinarily resides with that person; or

(b) is in receipt of a qualifying component.^F187]

3. A person who is in receipt of income-based job seeker’s allowance and—

(a) has parental responsibility for a child under the age of 5 who ordinarily resides with that person; or

(b) is in receipt of a qualifying component.

[^F188 4. A person who is in receipt of universal credit, and [^F189 has an earned income of between £0 and £1,349 in at least one relevant assessment period^F189] , and—

[^F190 (a) has limited capability for work or limited capability for work and work-related activity as determined in accordance with Part 5 of the Universal Credit Regulations 2013;^F190]

(b) is in receipt of the disabled child element; or

(c) has parental responsibility for a child under the age of 5 who ordinarily resides with that person.

5. A person who is receiving child tax credit by virtue of an award which is based on an annual income not exceeding £16,190, and—

(a) is in receipt of a qualifying component falling within paragraph (a) or (b) of the definition of “qualifying component” in Part 3; or

(b) has parental responsibility for a child under the age of 5 who ordinarily resides with that person.^F188]

PART 2 Verification measures referred to in regulation 19(7)(a) _I44,I45,I46

1. Obtaining from each customer, orally or in writing—

(a) the customer’s name, address and telephone number;

(b) a declaration that the customer meets the supplier’s eligibility criteria; and

(c) an explanation of how the customer meets those criteria.

2. Explaining to each customer that the customer may be asked to provide further evidence of eligibility before receiving a rebate under the Warm Home Discount scheme.

3. In relation to at least 5% of the number of customers which the compulsory scheme electricity supplier provides with the prescribed rebate in a scheme year, obtaining documentary evidence before providing the prescribed rebate that the customer meets the supplier’s eligibility criteria.

PART 3 Interpretation _I47

In this Schedule—

[^F191 “annual income” means the income for the tax year calculated in accordance with the Tax Credits (Definition and Calculation of Income) Regulations 2002 ; ^F191]

[^F191 “child tax credit” has the meaning given in Part 1 of the Tax Credits Act 2002 ; ^F191]

“ documentary evidence ” includes copies of documents;

[^F192 “earned income” means a person’s earned income calculated in accordance with Chapter 2 of Part 6 of the Universal Credit Regulations 2013 ;

“member of the work-related activity group” means a person who has or is treated as having limited capability for work under Part 5 of the Employment and Support Allowance Regulations 2008 other than by virtue of regulation 30 of those Regulations; ^F192]

[^F191 “parental responsibility” has the meaning given in section 3 of the Children Act 1989 ; ^F191]

“ qualifying component ” means—

[^F193 “relevant assessment period” means an assessment period beginning on a date no earlier than 6 months before the date on which the scheme year starts, where “assessment period” has the meaning given in regulation 21 of the Universal Credit Regulations 2013 ; ^F193]

[^F191 “universal credit” has the meaning given in section 1 of the Welfare Reform Act 2012 ; ^F191]

Regulation 24(2) and (4)

SCHEDULE 3 Determination of legacy spending

PART 1 Information to be provided by relevant suppliers to the Authority _{I48,I49,I50,I51,I52}

1. The mean annual household electricity consumption in the scheme year of all domestic customers supplied by the relevant supplier with electricity at a discounted tariff.

2. The mean annual household gas consumption in the scheme year of all domestic customers supplied by the relevant supplier with gas at a discounted tariff.

3. For each combination of fuel type and payment method—

(a) the number of customers supplied at a discounted tariff (“discounted tariff customers”) on the last day of each month in the scheme year;

(b) unless sub-paragraph (d) applies, the price of the discounted tariff on the last day of each month in the scheme year;

(c) unless sub-paragraph (e) applies, the price of the reference tariff on the last day of each month in the scheme year;

(d) if the supplier charges different prices in different regions for the discounted tariff, the mean, on the last day of each month in the scheme year, of the prices of the discounted tariff in each region in which the supplier has customers on that tariff, and

(e) if the supplier charges different prices in different regions for the reference tariff, the mean, on the last day of each month in the scheme year, of the prices of the reference tariff in each region in which the supplier has customers on that tariff.

4. For each combination of fuel type, payment method and month—

(a) the total annual cost of fuel for a discounted tariff customer (“ D ”), and

(b) the total annual cost of fuel for a customer paying a reference tariff (“ R ”),

on the assumptions that (in each case)—

(i) the customer’s rate of consumption of each fuel supplied to that customer is the mean rate of consumption of all the supplier’s discounted tariff customers;

(ii) the customer remains on that tariff for a year;

(iii) the price of the tariff on the last day of that month remains unchanged for that year; and

(iv) if the supplier charges different prices in different regions for the tariff, the price paid by the customer is the mean of the prices charged in each region in which the supplier has customers on that tariff.

5. The amount of each rebate provided by the supplier under Chapter 3 of Part 4, and the number of customers provided with a rebate of that amount.

PART 2 Method to be used by the Authority to calculate the value of discounted tariffs provided by a relevant supplier _I53,I54,I55

1. In relation to each month in a scheme year—

(a) for each combination of fuel type and payment method, (R – D) is to be multiplied by the relevant supplier’s number of discounted tariff customers on the last day of the month; and

(b) for each fuel type, the amounts calculated under sub-paragraph (a) for different payment methods are to be added together.

2. For each fuel type—

(a) in relation to each quarter, the mean of the amounts calculated under paragraph 1(b) for the months in that quarter is to be multiplied by the relevant weighting; and

(b) the amounts calculated under sub-paragraph (a) for each quarter in the scheme year are to be added together.

3. The amounts calculated under paragraph 2(b) for each fuel type are to be added together.

PART 3 Supplementary _I56,I57

1. For the purposes of Part 1, all prices, costs and amounts are to be notified excluding Value Added Tax.

2. In this Schedule—

“ quarter ” means—

“relevant weighting”, for a fuel type and a quarter, means the percentage specified in the following table—

[^F194 Regulations 15A(3) and^F194] 26(1) and (2)

SCHEDULE 4 Industry initiatives _I58

[^F195PART 1 Table of industry initiatives^F195]

[^F203PART 2 Requirements for installations of boilers and central heating systems

1. The installation of a boiler meets the requirements of this Part if the conditions in paragraph 2 or 3 are met.

2. The conditions in this paragraph are met if—

(a) the boiler is installed by, or under the responsibility of, a person who is registered with TrustMark for the purposes of installing boilers; and

(b) a certificate of lodgement is issued by the operator of TrustMark in respect of the installation.

3. The conditions in this paragraph are met if the boiler is installed subject to arrangements for quality assurance and consumer protection, including arrangements for repairs and other remedies and arrangements for compliance with PAS 2030:2019 and PAS 2035:2019, which are equivalent to the requirements under TrustMark.

4. The installation of a central heating system meets the requirements of this Part if the conditions in paragraph 5 or 6 are met.

5. The conditions in this paragraph are met if—

(a) the central heating system is installed by, or under the responsibility of, a person who is registered with TrustMark for the purposes of installing central heating systems; and

(b) a certificate of lodgement is issued by the operator of TrustMark in respect of the installation.

6. The conditions in this paragraph are met if the central heating system is installed subject to arrangements for quality assurance and consumer protection, including arrangements for repairs and other remedies and arrangements for compliance with PAS 2030:2019 and PAS 2035:2019, which are equivalent to the requirements under TrustMark.^F203]

[^F203PART 3 Interpretation

In this Schedule—

“central heating system” means a system which provides heat for the purposes of space heating through a boiler or other heat source connected to one or more separate heat emitters and where the heat source and heat emitters are all situated in the same domestic premises or building;

“certificate of lodgement” means a document entitled “TrustMark Certificate of Lodgement” which sets out the address at which a measure has been installed and the type of measure;

“debt write-off” has the same meaning as in regulation 15(6);

“installation” includes the carrying out of a repair, and cognate expressions are to be construed accordingly;

“PAS 2030:2019” means Publicly Available Specification 2030:2019;

“PAS 2035:2019” means Publicly Available Specification 2035:2019;

“TrustMark” means the scheme of that name operated by TrustMark (2005) Limited, a company registered in England and Wales with company number 05480144. ^F203]