Section 8H: The ownership unbundling requirement, Gas Act 1986

In section 8G(3) the ownership unbundling requirement is met by an applicant for certification if in relation to each of the five tests below—

the Authority thinks that it is passed, or

it is treated as passed by virtue of subsection (7), (9) or (9A).

The first test is that the applicant—

does not control a relevant producer or supplier;

does not have a majority shareholding in a relevant producer or supplier; and

will not, on or after the relevant date, exercise shareholder rights in relation to a relevant producer or supplier.

For the purposes of subsection (2)(c), the Authority is entitled to think that the applicant will not exercise shareholder rights if the applicant has given an undertaking not to exercise those shareholder rights.

The second test is that, where the applicant is a company, partnership or other business, none of its senior officers has been, or may be, appointed by a person who—

controls a gas undertaking which is a relevant producer or supplier; or

has a majority shareholding in a gas undertaking which is a relevant producer or supplier.

The third test is that, where the applicant is a company, partnership or other business, none of its senior officers is also a senior officer of a gas undertaking which is a relevant producer or supplier.

The fourth test is that the applicant is not controlled by a person who controls a relevant producer or supplier.

But even where the fourth test is not passed, the Authority may treat it as passed if—

the control over the applicant was gained through the exercise of a right conferred as a condition of the provision of either financial support or a guarantee (or both), in relation to the applicant's business; or

the control over the relevant producer or supplier was gained through the exercise of such a right conferred in relation to the business of the relevant producer or supplier.

The fifth test is that the applicant is not controlled by a person who has a majority shareholding in a relevant producer or supplier.

But even where the fifth test is not passed, the Authority may treat it as passed if—

the majority shareholding in the relevant producer or supplier was gained through the exercise of such a right conferred in relation to the business of the relevant producer or supplier.

The Authority may treat one or more of the five tests in this section as passed if—

the test or tests are not passed in relation to a relevant producer or supplier,

the applicant has demonstrated to the Authority's satisfaction that the applicant does not have a relationship with the relevant producer or supplier which might lead the applicant to discriminate in favour of the relevant producer or supplier, and

the Authority thinks it appropriate to treat the test or tests as passed.

In subsection (2)(c) "relevant date" means the relevant date for the purposes of section 8C(1) or (2).

Section 8H: The ownership unbundling requirement

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