An organisation (A) contracts for a supply of electricity and passes some of that supply to a third party organisation (B). B's percentage share of the cost of the electricity is based on factors such as the floor area it occupies or headcount rather than being sub metered. B will be responsible for the electricity supplies that it consumes. Even though the onward supply to B is not sub metered, the EA consider that the supply to B is measured by a metering device and can amount to a "supply" within the terms of paragraph 1 of Schedule 1 to the CRC Energy Efficiency Scheme Order 2010 (SI 2010/768)) (the CRC Order) because the supply to A is metered.

Paragraphs 26 and 27 of Schedule 1 to the CRC Order require an additional 10% to be added to the amount of a Participant's energy supplies where it has to estimate the amount for over half of the Compliance Year in question. This is known as the "estimation uplift" or "estimation adjustment".

The Clarification Note provides that, where the supply to an organisation is a percentage of a meter reading (as would be the case in the example given in Onward supplies that are not separately metered will still count towards qualification and will be treated as CRC Emissions above), the estimation uplift will not apply as long as the total supply is metered and accounted for in the CRC.

If some of the metered supply falls outside the scope of the CRC, the estimation uplift will apply to the estimated energy supplies that remain in the CRC in order to promote sub metering in those situations. In the example above, if both A and B are Participants, the estimation uplift will not apply, but if B is not a Participant, then A would have to add 10% to its estimated share of the electricity supply.

For more information about the estimation uplift, see Environment Agency guidance: CRC Energy Efficiency Scheme: Estimation techniques.

A Self-supply of electricity or gas can only take place within the same legally defined Undertaking or Public Body.

A supply by a member of a private or public sector Group to another member of that Group will not amount to a Self-supply within the meaning of paragraph 6 of Schedule 1 to the CRC Order.

The rule that a landlord will be responsible under the CRC for energy supplies that it procures on behalf of its tenants is contained in paragraph 14 of Schedule 1 to the CRC Order. The Clarification Note confirms that the wording in that paragraph also covers licence arrangements.

If an organisation (A) leases premises to another organisation (B) and B then leases the premises back to A (a lease and leaseback), the Clarification Note says that B will be considered to be A's landlord under the CRC.

The Clarification Note does not mention what happens where a sub-lease is granted (that is, where A leases premises to B and B then leases those premises to a third organisation (C). Prior to the Clarification Note being issued, it had been assumed that in this scenario where the head landlord procures the energy supplies to the demised premises, that it would be responsible for those supplies under the CRC. It is not clear if this has changed as a result of the Clarification Note. The scenarios set out at the end of the Clarification Note only cover a situation where B is paying for the energy supply contract.

If a landlord supplies fuel to its tenant in respect of premises where that fuel is used to generate electricity, the landlord is responsible under the CRC for the fuel and for the electricity generated by it. The tenant will be eligible for Electricity Generating Credits (EGCs).

The Clarification Note says that this is a result of the fact that there is no link between:

PLC has previously highlighted that organisations who pay for energy supplies measured through a sub meter (other than tenants receiving a supply of energy through their landlord) will have to use those supplies to assess whether they qualify as a Participant in the scheme (where they are electricity supplies) and when reporting their CRC Emissions.

The Clarification Note confirms this point.

The Clarification Note says that clip-on devices are electricity display devices that provide customers with a rough indication of the amount of electricity being used. As they are not used for charging purposes, they do not fall within the definition of metering device in paragraphs 1 or 2 of Schedule 1 to the CRC Order and so should not be used to determine whether a supply exists or who is responsible for it. These devices will not qualify as an Automatic Meter (defined in paragraph 5(4) of Schedule 8 to the CRC Order) for the purposes of the Early Action Metric (EAM).

The Clarification Note says that there are no equivalent devices for gas but that the term "clip-on device" is sometimes used to describe the conversion of a dial read gas meter to a remotely read meter using optical character recognition technology. In this context, the dial meter and the additional clip-on device will be considered to be a metering device under the CRC if it is used for charging purposes. If such meters are capable of being utilised as a Daily Meter or an Hourly Meter they can be classed as Automatic Meters for the purposes of the EAM (providing the conversion has been done prior to 31 March 2011, which is the cut-off date for that part of the EAM).

The Clarification Note says that, where a facilities management provider (FM provider) is reimbursed 100% of the cost of any energy supply based on a meter reading, its client (on whose behalf it is procuring the energy supply) will be responsible for the supply. This will be the case even if the FM provider occupies part of the premises with its client's permission.

However, if the contract between the FM provider and its client says that the FM provider has to pay for its own energy use in the building based on a sub meter or a percentage share of the metered supply, the FM provider will be responsible for the share of the energy supply that it consumes.