EGL22100 | Relevant generating stations: meaning of ‘generating undertaking’

The concept of a generating undertaking is fundamental to the levy, as it is at this level that the levy is calculated. It can either be a single company or a group of companies.

Definition

A generating undertaking is defined at F(2)A23/S280(1) as follows:

• A company that is not part of group of companies, is a qualifying generating undertaking if it operates a relevant generating station.

• A group of companies is a generating undertaking if one or more companies within the group operates a relevant generating station.

The application of the levy to groups of companies and other structures is covered in detail at EGL30000+ onwards.

Where the generating undertaking is a group of companies, then all members of the group are included. The purpose of this rule is to ensure that transactions occurring between group members are properly recognised when calculating the undertakings exceptional generation receipts. This is relevant where selling the group’s power, hedging its sales contracts and similar operations are carried out in a group company other than the company undertaking generation.

See EGL31000 for the definition of a group for the purposes of the EGL.

See EGL32000 for the arrangements for charging and collection of the levy for a “nominated company” where the generating undertaking is a group.