Ask the team: CRC Energy Efficiency Scheme: Does the removal of the requirement to make an information disclosure apply retrospectively? | Practical Law

Ask the team: CRC Energy Efficiency Scheme: Does the removal of the requirement to make an information disclosure apply retrospectively? | Practical Law

An Ask the team article on whether the removal of the requirement to make an information disclosure in respect of phase 2 and subsequent phases of the CRC Energy Efficiency Scheme (CRC), as a result of the CRC Energy Efficiency Scheme (Amendment) Order 2011 (SI 2011/234), applies retrospectively so that enforcement action can no longer be taken against organisations that failed to make an information disclosure for the introductory phase.

Ask the team: CRC Energy Efficiency Scheme: Does the removal of the requirement to make an information disclosure apply retrospectively?

by PLC Environment
Published on 23 Feb 2011 • UK
An Ask the team article on whether the removal of the requirement to make an information disclosure in respect of phase 2 and subsequent phases of the CRC Energy Efficiency Scheme (CRC), as a result of the CRC Energy Efficiency Scheme (Amendment) Order 2011 (SI 2011/234), applies retrospectively so that enforcement action can no longer be taken against organisations that failed to make an information disclosure for the introductory phase.

Question

Terms that appear in capital letters in this Ask the team article are defined in Practice note, CRC Energy Efficiency Scheme: PLC glossary and abbreviations.
The CRC Energy Efficiency Scheme (Amendment) Order 2011 (SI 2011/234) (the CRC Amendment Order) revoked:
  • Article 62 of the CRC Energy Efficiency Scheme Order 2010 (SI 2010/768) (the CRC Order), which required organisations that had at least one Settled Half Hourly meter (Settled HHM) but which had supplies of less than 6,000 MWh of Qualifying Electricity in the Qualification Year, to make an Information Disclosure by the registration deadline for the relevant Phase.
  • Article 103 of the CRC Order, which specified the penalty for failing to make an Information Disclosure by the registration deadline for the relevant Phase.
The CRC Amendment Order comes into force on 1 April 2011.
Does the revocation of these articles in the CRC Order have retrospective effect? Can an organisation that failed to make an Information Disclosure by the registration deadline of 30 September 2010 for the Introductory Phase have a civil penalty imposed on it by the Administrator?
If the removal of the requirement to make an Information Disclosure does not have retrospective effect, will the Administrator impose a civil penalty against an organisation that failed to comply with article 62 by the registration deadline of 30 September 2010 for the Introductory Phase of the CRC even though this is no longer a requirement for subsequent Phases of the scheme?

Answer

The CRC Amendment Order simply says that articles 62 and 103 are revoked.
In relation to Phase 2 and subsequent Phases, there is no longer a requirement for organisations with a Settled HHM to make an Information Disclosure.
The CRC Amendment Order does not say anything about the revocation of articles 62 or 103 having retrospective effect. In our view, the requirement for companies to make an Information Disclosure in relation to the Introductory Phase could still be the subject of a civil penalty.
Our rationale for this view is different depending on exactly when a civil penalty is imposed:
  • Enforcement action taken before 1 April 2011: Articles 62 (the requirement to make an Information Disclosure) and 103 (outlining the penalties for failing to make an Information Disclosure) will remain in force until 31 March 2011 so the Administrator clearly has the power to impose a civil penalty until that date.
  • Enforcement action taken after 1 April 2011: In our view, the Administrator can impose a civil penalty after 1 April 2011 on organisations that failed to make an Information Disclosure by 30 September 2010, as a breach of the CRC Order was committed when articles 62 and 103 were in force. The fact that these provisions were then revoked before any penalty was imposed does not change the fact that such companies were in breach of the CRC Order at the time and, therefore, could still be the subject of a civil penalty. What matters is the law that was applicable at the date of the breach and not the law that applied on the date the civil penalty was imposed.
It is worth bearing in mind that the Administrator has a power to impose a civil penalty but it is not under a duty to do so (see article 92 of the CRC Order). So it is possible that it could exercise its discretion in these types of cases and decide not to impose a civil penalty. However, we are not aware of any pronouncements from the Administrator that this is what it proposes to do.

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