The CRC Order provides that where an organisation is "responsible" for an electricity supply:

Where an organisation is responsible for supplies of gas and other fuels it must similarly consider whether it must report those supplies and surrender Allowances in respect of emissions associated with those supplies.

Prior to this concept of responsibility for an energy supply, the draft CRC Order required organisations to assess their qualification for the CRC and report their energy supplies where they were the "counterparty to the energy supply contract".

The CRC Order does not contain a definition of "responsibility for a supply". There are many factors that need to be considered to determine when an organisation is responsible for an energy supply, including:

This Ask the team concentrates on the meter type and its influence on responsibility for the supply

The relevant parts of Schedule 1 to the CRC Order regarding the concept of responsibility for an energy supply are:

Paragraphs 1 and 2 require a supply for the purposes of the CRC, to be made through a metering device (except in the case of Dynamic Supply in relation to electricity). Metering device is defined in both paragraphs as being a device where the electricity or gas supply (as relevant) is charged for, as measured by the device.

The conventional interpretation of the wording regarding metering device in paragraphs 1 and 2 of Schedule 1 to the CRC Order was that it referred to a fiscal meter. The term "fiscal meter" is usually used by energy managers and those in the energy industry to refer to meters that an electricity or gas supplier uses to calculate the bill which it presents to its customer for payment.

This interpretation was supported by the wording at page 30 of the version of the CRC User Guide published in January 2010 and also the wording at page 50 of the Response to the Consultation published in October 2009. Both these documents mention the need for the supply to be measured by a fiscal meter. The CRC User Guide does not define fiscal meter but the Response Document defines fiscal meter as "one from which data is used to [for] billing purposes".

The Response to the Consultation goes on to say that "where a supply is not measured by a fiscal meter (for example, when electricity is delivered via private wire or is measured by a sub meter), the conditions outlined above are not met and the supply is not captured under the CRC."

However, the definition of metering device in paragraphs 1 and 2 of Schedule 1 to the CRC Order appears to be wide enough to cover sub metering.

In response to the queries that PLC received, we contacted the Environment Agency's (EA's) CRC Helpdesk asking for clarification of the treatment of sub meters under the CRC. Specifically, we asked if an organisation received a supply of energy from a third party that was measured by a sub meter and, if that organisation was charged by the third party for the energy it consumed on the basis of reading from that sub meter, would the organisation be responsible for that supply under the CRC?

The CRC Helpdesk confirmed to PLC that the definition of metering device in paragraphs 1 and 2 of Schedule 1 to the CRC order could include sub meters used for payment purposes and that it will also capture some types of private wire supply arrangements.

PLC requested further clarification from the CRC Helpdesk regarding how sub meters installed in relation to leased premises could be treated under the CRC, particularly in view of the landlord and tenant rule. For more information on this rule, see The landlord and tenant rule below.

PLC was concerned that in buildings where the landlord procures energy for the building as a whole (monitored by a main meter) but distributes it to tenants (with each demise being monitored by a sub meter) then both the landlord and the tenant might be said to have responsibility for the supplies to the demised areas, because both satisfy the conditions in paragraphs 1 or 2 of Schedule 1 to the CRC Order (as relevant).

This might result in double counting of energy supplies to demised premises.

In March the EA's guidance on meters and metering was published and the definition of metering devices on page 10 echoes the definition of metering device in the CRC Order. The EA guidance also states that "this definition includes private wire arrangements and sub-meters where a metering device is used to measure electricity and/or gas supply for charging purposes."

In April 2010, the CRC User Guide was republished and the reference in it on page 30 to fiscal meters was amended to refer to the wider definition of metering device in the CRC Order.

In response to PLC's request for clarification, the CRC Helpdesk has confirmed that:

PLC takes this to mean that:

Depending on how and when this is clarified, tenants who are in such a position may wish to obtain direct confirmation in writing from the CRC Helpdesk that they need not include these sub metered supplies in their assessment of their need to register as a Participant in the Introductory Phase of the CRC or (if the tenant is a Participant) in any future reports.

It is important to remember that an organisation will only be required to register as a participant in the Introductory Phase of the CRC if it satisfies all of these criteria:

Therefore, the fact that the organisation is responsible for an electricity supply will not, of itself, determine that it must register as a Participant in respect of a particular Phase of the CRC.

For more information on the Qualification Criteria and the process for deciding whether to register as a Participant, see:

Where a landlord procures a supply of energy which it then on-supplies to its tenants, consuming none of the energy itself, it remains responsible for that supply. The usual rule (allowing Unconsumed Supplies to be excluded) is overridden by this landlord and tenant rule (paragraph 14, Schedule 1, CRC Order). For more details see Practice note, CRC Energy Efficiency Scheme: overview: Landlords and tenants.

In this example, Company A is a big manufacturing company with a large freehold site. Company A sells part of the site to Company B. Prior to the sale, Company A installs sub meters in the two buildings that Company B occupies. The sale contract with Company B provides that Company A will continue to procure electricity for the entire site (including the part that has been sold) and that Company B will pay Company A for its share of the bill that Company A receives from its electricity supplier, based on the readings from the sub meters. Effectively, Company A is acting as an intermediary supplier to Company B.

In this example, Company A is a big manufacturing company with a large freehold site. Company A sells part of the site to Company B. The supplies of electricity to the sold part of the site are not separately metered or sub metered. The sale contract with Company B provides that Company A will continue to procure electricity for the entire site (including the part that has been sold) and that Company B will pay Company A for a fair share of the bill that Company A receives from its electricity supplier. Effectively, Company A is acting as an intermediary supplier to Company B.

In this example, Company A is a big manufacturing company with a large freehold site. Company A leases part of the site to Company B. The electricity supply to the demised part is not separately metered, nor is there a sub meter. The lease with Company B requires the landlord, Company A, to supply electricity to the demised premises and requires the tenant (Company B) to pay Company A for a fair share of the bill that Company A receives from its electricity supplier. Effectively, Company A is acting as an intermediary supplier to its tenant, Company B.

In this example, Company A is a big manufacturing company with a large freehold site. Company A leases part of the site to Company B. Prior to grant of the lease, Company A installs sub meters to the demised part. The lease with Company B requires the landlord, (Company A) to supply electricity to the demised premises and requires the tenant (Company B) to pay its landlord for the electricity supplied, based on the readings from the sub meters. Effectively, Company A is acting as an intermediary supplier to its tenant, Company B.