- Open - Provisional Order issued
- Provisional Order confirmed
- Decision Proposed - Confirm Provisional Order
- Decision Proposed - Revoke Provisional Order
- Notice to rectify
- Notice to revoke licence
Notice of failure to comply with a confirmed Provisional Order
On 27 March 2023 the Authority issued Delta Gas and Power Ltd (“Delta”) with a Notice of failure to comply with a confirmed Provisional Order within the meaning of section 25 of the Electricity Act 1989 and section 28 of the Gas Act 1986.
The notice provided Delta with written notice, pursuant to Schedule 2(1)(c)(i) of the Electricity Supply Licence and Schedule 2(1)(c)(i) of the Gas Supply Licence, of failure to comply with the Provisional Order, confirmed with modifications, issued to Delta on 6 February 2023.
The notice further explained that if this failure was not rectified to the satisfaction of the Authority within three months of Delta receiving the notice, the Authority may at any time revoke Delta’s electricity and gas licences subject to giving no less than 30 days’ notice.
Decision to confirm Provisional Order
On 6 February 2023, the Authority published the confirmation of the provisional order dated 7 November 2022, with modifications, issued to Delta Gas and Power Ltd, following the consultation period.
The Authority noted that no representations were received by the deadline of 2 February 2023 in the context of the consultation undertaken pursuant to section 26(1) of the Electricity Act 1989 and section 29(1) of the Gas Act 1986.
The Authority is satisfied that Delta is contravening or is likely to contravene the Operational Capability Principle (Standard Licence Condition 4A). This confirmed provisional order requires that Delta does not act in contravention of SLC 4A and improves its operational capability such that it can respond accurately and on time to any Requests for Information from the Authority in relation to its financial position and arrangements or otherwise.
Further details are contained in the order itself and the Notice of Reasons, below.
Notice of Proposal to Confirm Provisional Order
On 11 January 2023 the Authority issued its notice of proposal to confirm the provisional order dated 7 November 2022, with modifications, imposed on Delta on the grounds that Delta is contravening or is likely to contravene Standard Licence Conditions (SLC) 4A (Operational Capability Principle). The Notice of Proposal invites representations or objections in relation to the proposed confirmation by 2 February 2023. The Authority gives notice that in accordance with section 26(1) of the Electricity Act 1989 (“EA89”) and 29(1) of the Gas Act 1986 “GA86.”:
- The requirement to have the operational capability to respond accurately and on time to any Requests for Information from the Authority in relation to its financial position and arrangements or otherwise is the requirement for the purposes of the modified provisional order. The acts or omissions which, in the Authority’s opinion, constitute or would constitute contraventions of those conditions and requirements, and other factors which in the Authority’s opinion justify the confirmation of the provisional order are those set out in the Notice of proposal to confirm the provisional order.
- Any representations or objections with respect to the proposed confirmation are to be made to the Authority by 5pm, 2 February by email to email@example.com and firstname.lastname@example.org
The Authority will consider these representations and then make a final decision on whether to confirm the provisional order prior to 7 February 2023 (the date on which the provisional order would lapse if not confirmed).
Issue of Provisional Order
On 7 November 2022, the Authority issued a provisional order to Delta Gas and Power Ltd (“Delta”) in accordance with section 25(2) of the Electricity Act 1989 (“EA89”) and 28(2) of the Gas Act 1986 “GA86.”
The Authority considered that Delta was contravening or was likely to contravene Standard Licence Conditions (SLC)s 4A (Operational Capability Principle) and 4B (Financial Responsibility Principle).
The particular areas of concern giving rise to the making of the provisional order were that Delta:
- Did not appear to have the capability to comply with its relevant legislative and regulatory obligations
- Was not able to responsibly manage its costs at risk of being mutualised and did not have adequate arrangements in place to meet those costs because:
- It did not appear to have adequate financial arrangements in place to operate effectively under the stress-test scenarios set by the Authority
- It did not appear to have adequate hedging in place at a time of volatile wholesale energy prices
The provisional order required Delta to address our concerns immediately and fully. Until such time, the provisional order banned Delta from taking on any new customers and removing any money from the business unless it constituted spending essential to the operation of Delta’s supply business.
Provisional orders are issued in certain circumstances in accordance with the EA89 or GA86 and where certain conditions are satisfied. Further information regarding provisional orders is contained within our Enforcement Guidelines.