Section 299 | Amount that may be surrendered and use of that amount

(1)Subject to subsection (7), the maximum amount of a shortfall amount that may be surrendered by a generating undertaking (“A”) to another (“B”) where A is a relevant shareholder in B, is the lesser of the amounts given by subsections (2) and (3).

(2)The amount given by this subsection is the amount of the shortfall amount of A that is, on a fair and reasonable basis, referable to A’s interest in the generation attributed to B in the overlap period.

(3)The amount given by this subsection is the amount of the exceptional generation receipts of B for the shortfall period that is, on a fair and reasonable basis, referable to A’s interest in the generation attributed to B in the overlap period.

(4)Subject to subsection (7), the maximum amount of a shortfall amount that may be surrendered by a generating undertaking (“C”) to another (“D”) where D is a relevant shareholder in C is the lesser of the amounts given by subsections (5) and (6).

(5)The amount given by this subsection is the amount of the shortfall amount of C that is, on a fair and reasonable basis, referable to D’s interest in the generation attributed to C in the overlap period.

(6)The amount given by this subsection is the amount of the exceptional generation receipts of D for the shortfall period that is, on a fair and reasonable basis, referable to D’s interest in the generation attributed to C in the overlap period.

(7)A generating undertaking may only surrender an amount of a shortfall amount relating to an overlap period if the result of Step 5 in section 279(5) for the undertaking for the qualifying period in which the overlap period falls would not exceed nil if—

(a)all of the steps in section 279(5) for that qualifying period were carried out, including steps that would normally be ignored because a result of nil or less has already been found,

(b)the amount surrendered were added to the result of Step 5, and

(c)all other amounts surrendered for overlap periods falling with that period were added to the result of that Step.

(8)Where an amount of a shortfall amount has been surrendered to a generating undertaking, that amount is to reduce the result of Step 5 in section 279(5), but not below nil, for the qualifying period in which the overlap period to which the shortfall amount relates falls.

(9)A surrender of an amount of a shortfall amount is effective only if—

(a)the generating undertaking which is surrendering the amount has consented to surrender that amount to the other generating undertaking, and

(b)the other generating undertaking has made a claim to that amount (see section 305).