Ask the team: CRC Energy Efficiency Scheme: Do I need to make an information disclosure if I have bought a company with an HHM after the qualification year?

Practical Law UK Legal Update 5-501-9879 (Approx. 4 pages)

Ask the team: CRC Energy Efficiency Scheme: Do I need to make an information disclosure if I have bought a company with an HHM after the qualification year?

by PLC Environment

Question

Terms that appear in capital letters in this Ask the team are defined in Practice note, CRC Energy Efficiency Scheme: PLC glossary and abbreviations.

My company took over a business in December 2009. This new subsidiary is supplied with electricity via a half hourly meter (HHM). Before we acquired this subsidiary, my company did not have any HHMs and so we were not required to register for the CRC Energy Efficiency Scheme (CRC) or to make an information disclosure.

Based on our group's total electricity consumption (that is, including the new subsidiary) since the takeover, we estimate that our annual electricity consumption is under 4,000 MWh. We do not have any electricity supply data for the new subsidiary for 2008 as, at that time, it belonged to the previous owners.

Do we need to make an information disclosure? If yes, where do I get the data from?

Answer

In order to work out if your company is required to participate in the Introductory Phase of the CRC (April 2010-March 2013) or to make an Information Disclosure, you need to consider if it met the Qualification Criteria (see Practice note, CRC Energy Efficiency Scheme: overview: Qualification Criteria). Articles 24 and 27 of the CRC Energy Efficiency Scheme Order 2010 (SI 2010/768) (the CRC Order) specify that if a single company or a Group (as applicable) met the Qualification Criteria during the Qualification Year for a Phase (or any part of that year) then it must register as a Participant.

There are two limbs to the Qualification Criteria. The first is that the company is supplied with electricity by at least one Settled HHM. The second is that the Qualifying Electricity supplied to that company was over 6,000 MWh during the Qualification Year. The Qualification Year for the Introductory Phase was the 2008 calendar year.

For more information on the Qualification Criteria, see Flowchart, CRC Energy Efficiency Scheme: How to work out whether your organisation is covered by the scheme.

Article 65 of the CRC Order specifies that an organisation that is supplied with electricity via a Settled HHM during the Qualification Year, but that had supplies of Qualifying Electricity that were less than 6,000 MWh during the Qualification Year, will need to provide the Administrator with information about its Settled HHMs and the amount of that supply (an Information Disclosure).

The Introductory Phase

As your company did not have any type of HHM (settled or otherwise) during the Qualification Year for the Introductory Phase (calendar year 2008), it has not met the Qualification Criteria and will not have to participate in the Introductory Phase of the CRC.

As your company did not meet the first limb of the Qualification Criteria (that is, having a Settled HHM at any time during 2008) you will not need to make an Information Disclosure in respect of the Introductory Phase.

As the combined annual electricity consumption of your company and the subsidiary that you acquired in December 2009 is under 6,000 MWh, the subsidiary is neither an existing Participant nor a Significant Group Undertaking (SGU), so the rules which specify when you need to register as a Participant following a significant change to your Group structure in the Post-qualification Period will not apply. For more information, see Flowchart, CRC Energy Efficiency Scheme: Impact of changes to private sector organisations before registration.

Phase 2 of the CRC

Organisations need to assess whether they are required to participate in the CRC in respect of each Phase. The Qualification Year for Phase 2 is 1 April 2010 to 31 March 2011. For more information about the Phases of the CRC, see CRC Energy Efficiency Scheme: PLC timeline.

If your subsidiary's HHM is one of the types of metering equipment that can be settled on the Half Hourly Market (that is, a Mandatory HHM, a Voluntary HHM or a Half-hourly Light Meter) then you will meet the first limb of the Qualification Criteria for Phase 2 of the CRC. Depending on the amount of Qualifying Electricity that your Group is responsible for during the Qualification Year for Phase 2, you will either need to:

Make an Information Disclosure, if those supplies are less than 6,000 MWh; or
Register to participate in Phase 2, if your supplies of Qualifying Electricity are 6,000 MWh or more.

You will need to ensure that you have the correct energy supply data to make an assessment in respect of the Qualification Year for Phase 2. Pages 6-12 of EA: CRC Energy Efficiency Scheme: Making an Information Disclosure guidance set out what information you will need and how to obtain it.

Article 63 of the CRC Order provides that you can request a statement from a licensed electricity supplier of the electricity supplies made to you and that this information must be provided to you within six weeks of the end of the year in respect of which the request is made. You should speak to your energy supplier so that you have the necessary information about your electricity supplies in time to decide whether you need to register to participate in Phase 2 of the CRC or whether you need to make an Information Disclosure.

Further information

For more information on:

Information Disclosures, see Practice note, CRC Energy Efficiency Scheme: overview: What do I have to do if I am not covered by the CRC?.
The CRC in general, see the CRC Survival Kit.

Comments

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Ask the team: CRC Energy Efficiency Scheme: Do I need to make an information disclosure if I have bought a company with an HHM after the qualification year? | Practical Law