Statute Details
- Title: Electricity (Control of Designated Electricity Licensees, etc., under Part 4A — Exemption) Order 2025
- Act Code: EA2001-S450-2025
- Legislation Type: Subsidiary Legislation (SL)
- Authorising Act: Electricity Act 2001
- Authorising Power: Section 30CA of the Electricity Act 2001
- Order Number: S 450/2025
- Commencement: 1 July 2025
- Status: Current version as at 27 Mar 2026
- Key Provisions (Extract): Section 1 (Citation and commencement); Section 2 (Exempted transactions)
What Is This Legislation About?
The Electricity (Control of Designated Electricity Licensees, etc., under Part 4A — Exemption) Order 2025 (“the Order”) is a targeted regulatory exemption made under the Electricity Act 2001. In practical terms, it carves out a narrow class of transactions from the statutory “control” regime applicable to certain electricity market participants—specifically, “designated electricity licensees”, “designated entities”, and “designated business trusts” falling within Part 4A of the Electricity Act 2001.
Part 4A of the Electricity Act 2001 is designed to regulate changes in control of specified electricity-related businesses, so that the Energy Market Authority (EMA) can assess whether proposed changes could affect market stability, security of supply, or other policy objectives. The Order does not repeal or replace Part 4A. Instead, it provides that certain transactions—defined as “pro forma changes”—are exempt from specific subsections of section 30B of the Act.
In plain language, the Order recognises that some corporate restructurings are administrative or internal in nature and do not alter the economic ownership position of the relevant person. Where there is no change in the percentage of equity interest held immediately before and after the transaction, the law treats the change as “pro forma” and does not trigger the same control-related requirements.
What Are the Key Provisions?
Section 1: Citation and commencement confirms the legal identity of the instrument and its effective date. The Order is cited as the Electricity (Control of Designated Electricity Licensees, etc., under Part 4A — Exemption) Order 2025 and comes into operation on 1 July 2025. For practitioners, this matters because the exemption only applies to transactions falling within its scope and occurring on or after commencement (unless the Act provides otherwise).
Section 2(1): Exemption from section 30B(1) for “pro forma change” is the core operative provision. It states that section 30B(1) of the Electricity Act 2001 does not apply to a designated electricity licensee, a designated entity, or the trustee-manager of a designated business trust in relation to a pro forma change.
Although the extract does not reproduce section 30B(1), the drafting indicates that section 30B(1) imposes some form of statutory requirement or restriction tied to changes in control or equity interests. The exemption means that, for a pro forma change, the designated party is not subject to that particular subsection. This is an important distinction: the Order is not a blanket exemption from the entire Part 4A regime; it is a targeted exemption from specified subsections.
Section 2(2): Exemption from section 30B(3) for persons entering into the transaction extends the exemption beyond the designated party. It provides that section 30B(3) does not apply to any person who enters into any transaction which is a pro forma change.
This is significant for deal structuring. In many corporate transactions, the designated licensee/entity/business trust may not be the contracting party in the same way as the shareholder or group company. By exempting “any person” who enters into the pro forma change transaction, the Order reduces compliance friction for the broader group of counterparties and ensures that the exemption is not undermined by technical contracting arrangements.
Section 2(3): Definition of “pro forma change” provides the legal test. A “pro forma change” means any transaction between a person and the person’s associate that results in the transfer to either of them of any equity interest in a designated electricity licensee, designated entity, or designated business trust, without any change to the percentage of equity interest held by the person in the licensee/entity/business trust immediately before the transaction is made.
In other words, the transaction must be:
- Between a person and that person’s associate (so it is intra-group or otherwise within the associate relationship);
- Involves transfer of equity interest in the designated electricity licensee/entity/business trust; and
- Does not change the person’s percentage equity interest in the designated party immediately before and after the transaction.
The illustration confirms the intended corporate restructuring scenario. It states that the transfer by a corporation (“A”) of equity interest held by A in a designated electricity licensee to a wholly-owned subsidiary of A constitutes a pro forma change. This is a classic example of reorganising shareholding within a corporate group while keeping the ultimate economic exposure unchanged.
How Is This Legislation Structured?
The Order is structured as a short instrument with two substantive provisions:
- Section 1 (Citation and commencement): identifies the Order and sets the commencement date (1 July 2025).
- Section 2 (Exempted transactions): creates the exemption framework by (i) exempting designated parties from section 30B(1) in relation to pro forma changes, (ii) exempting persons entering into pro forma change transactions from section 30B(3), and (iii) defining “pro forma change” and providing an illustration.
Notably, the Order is not divided into Parts or schedules in the extract provided. Its operative effect is achieved through the narrow drafting of exemptions tied to specific subsections of section 30B.
Who Does This Legislation Apply To?
The Order applies to transactions involving designated electricity licensees, designated entities, and designated business trusts that fall within the scope of Part 4A of the Electricity Act 2001. It also applies to the trustee-manager of a designated business trust, reflecting that business trusts operate through a trustee-manager structure rather than a conventional corporate board.
In addition, the exemption extends to any person who enters into a transaction that qualifies as a “pro forma change”. The operative definition requires that the transaction be between a person and the person’s associate. Practitioners should therefore pay close attention to how “associate” is defined in the Electricity Act 2001 (or in the relevant interpretive provisions), because the exemption depends on the relationship between the parties to the transaction.
Why Is This Legislation Important?
This Order matters because it provides regulatory certainty for intra-group restructurings that do not alter economic ownership. Without an exemption, corporate reorganisations—such as moving shareholdings from a parent to a wholly-owned subsidiary—could be treated as triggering “control” or “change in equity interest” compliance steps under section 30B. That could delay transactions, require additional approvals, or create uncertainty for corporate groups managing governance and tax or financing structures.
By defining “pro forma change” around the absence of any change in the percentage equity interest held by the person, the Order aligns the regulatory response with the policy rationale: the EMA’s control concerns are typically linked to changes that could affect who ultimately controls or benefits from the designated electricity business. Where the percentage interest remains unchanged and the transfer is within the same group, the transaction is less likely to create the risks that Part 4A is intended to address.
From an enforcement and compliance perspective, the exemption also reduces the risk of technical non-compliance. However, it does not eliminate the need for careful documentation. Lawyers should ensure that the transaction mechanics truly preserve the relevant percentage equity interest “immediately before” and “immediately after” the transaction. Even small changes—such as dilution, issuance, or changes in voting rights that effectively alter control—could undermine the “no change to percentage equity interest” requirement, depending on how equity interest is measured under the Act.
Finally, the Order is time-bound by its commencement date (1 July 2025) and is currently in force as at 27 March 2026. For practitioners advising on transactions around that period, confirming the applicable version and commencement is essential to determine whether the exemption is available.
Related Legislation
- Electricity Act 2001 (including Part 4A and section 30B; and the enabling provision in section 30CA)
- Electricity Act 2001 — Timeline (for version control and amendments affecting Part 4A and section 30B)
Source Documents
This article provides an overview of the Electricity (Control of Designated Electricity Licensees, etc., under Part 4A — Exemption) Order 2025 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.