UK Law and Practice Contributed by: Tom Sprange KC, Andrea Stauber, Martina Antosova and Lucy Pearson, King & Spalding International LLP
4.7 Open-Access and Non-Discriminatory Transmission The Electricity Standard Licence Conditions con- firm that preferential or discriminatory behaviour as between any persons is prohibited (see Conditions D5 and E19). 5. Distribution 5.1 Constructing and Operating Electricity Distribution Facilities DNOs are required to have a distribution licence under the Electricity Act 1989. Ofgem is responsible for issu- ing such licences, which are granted under Section 6 (1)(c) of the Electricity Act 1989. The holder of a distribution licence may not hold an electricity generation licence or a supply licence. Electricity distribution is a highly regulated activity. The procedure for applying for a licence and the fee payable are set out in Ofgem’s Electricity Licence Application Regulations (see 3.2 Obtaining Approv- als to Construct and Operate Generation Facilities ). Once Ofgem has deemed that an application for an electricity distribution licence has been duly made, it has six months to process the application. 5.3 Terms and Conditions Imposed in Approvals to Construct and Operate Electric Distribution Facilities The SLCs of an Electricity Distribution, which were consolidated in October 2021 and which remain appli- cable (with updates, including in October 2025), are split into 12 chapters: • Chapter 1 – Interpretation and Application; • Chapter 2 – Standard Conditions 4–7: General Obligations and Arrangements; • Chapter 3 – Standard Conditions 8–11: Public Ser- vice Requirements; • Chapter 4 – Standard Conditions 12–17: Arrange- ments for the Provision of Services; 5.2 Regulatory Process for Obtaining Approvals to Construct and Operate Electricity Distribution Facilities
• Chapter 5 – Standard Conditions 20–23: Industry Codes and Agreements; • Chapter 6 – Standard Conditions 24–28: Integrity and Development of the Network; • Chapter 7 – Standard Conditions 29–31: Financial and Ring-Fencing Arrangements; • Chapter 7A – Standard Conditions 31A–31D: Inde- pendent Distribution Network Operators; • Chapter 8 – Standard Conditions 32–33: Applica- tion and Interpretation of Section B; • Chapter 9 – Standard Conditions 34–39: Require- ments within the Distribution Services Area; • Chapter 10 – Standard Conditions 40–41: Credit Rating and Restriction of Indebtedness; • Chapter 11 – Standard Conditions 42–43: Inde- pendence of the Distribution Business; and • Chapter 12 – Standard Conditions 44–49: Provision of Regulatory Information. The licence can relate to any area or only to a speci- fied area. In practice, most distribution licences will cover the whole of Great Britain and – in some cases – will cover offshore distribution. The licence is a pub- lic document and is available on Ofgem’s electronic public register. 5.4 Eminent Domain, Condemnation or Expropriation Rights to Construct and Operate Electricity Distribution Facilities There are no general eminent domain rights or similar for electricity distribution facilities. 5.5 Monopoly Rights for Electricity Distribution Entities As DNOs own and operate the local distribution sys- tems within their allocated areas, they have a monop- oly and – in the absence of any price controls – each DNO could seek to maximise its profits by increas- ing its prices or reducing the availability of its service. DNOs are, therefore, regulated by Ofgem to ensure that they do not abuse their monopoly status. 5.6 Electricity Distribution System Charges and Terms of Service The principal law governing the provision of electric distribution service and the regulation of distribution charges and terms of service is the Electricity Act 1989. Standard conditions for generation, supply and
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