Home Information Cases South Wales Electricity Plc v Director General of Electricity Supply (1999)

Skip to content. | Skip to navigation

South Wales Electricity Plc v Director General of Electricity Supply (1999)


Under the Electricity Act 1989, an electricity supplier was not authorised to use its prepayment meters to collect water charges.


Application for a declaration that running an electricity and water prepayment scheme was within the claimant's statutory powers. The claimant ('Swalec') was a licensed public electricity supplier ('PES') under the Electricity Act 1989. A co-subsidiary, Dwr Cymru Cyfngedig ('Welsh Water'), was a statutory water undertaker. Swalec had launched the "2 in l Scheme", under which the amount a customer could afford to pay towards both electricity and water was assessed. A prepayment meter ('PPM') was then calibrated to take account of both payments. The customer would buy a token which had to be inserted into the PPM to obtain electricity. The payment made in this way was allocated between water and electricity. The scheme was entirely voluntary, enabled the less well off to budget more effectively, and had proved popular with Swalec's customers. Welsh Water wished to make the scheme available to other electricity suppliers. Swalec sought declarations that: (i) use of its PPMs to recover water debts and charges owed to Welsh Water in addition to recovering sums in respect of the supply of electricity was lawful and/or not contrary to the 1989 Act or in breach of the conditions of Swalec's licence under the 1989 Act; and (ii) the defendant had no power to bring enforcement proceedings under s.25 and s.26 of the 1989 Act in respect of that use. Under s.16 of the 1989 Act, PES had a duty to supply electricity on request, subject to certain exceptions. PPMs were envisaged by s.20 of the 1989 Act. Schedule 7 para.12(2) of the 1989 Act specified that a PPM should not be used to recover any sum owed to an electricity supplier otherwise than in respect of the supply of electricity, the provision of an electric line or electrical plant, or the provision of the PPM. The claimant argued that there was no prohibition in Sch.7 para.12 of the 1989 Act on debts due to any other creditor being collected through a PPM. The defendant argued that a PPM could never be used to recover charges unrelated to electricity supply. Under the scheme, electricity supply would cease if water charges were not duly paid. Parliament had only authorised a PPM to be used with that sanction for electricity supply.


(1) It could not be inferred that a customer was withdrawing his request to be supplied with electricity because the tokens in the PPM had run out. (2) The Gas Act 1986, which the claimant had cited, was not of assistance in the present case. (3) In construing statutes the court's task was to find the meaning of the words used by Parliament. It was not the function of the courts to extend or restrict the policy behind the legislation. It was not open to the court to write in words to impose a restriction which did not arise from the Act, properly construed, in an attempt to meet the defendant's submissions that a PPM might otherwise be used to collect all sorts of other debts. It was likewise not for the court to interpret the Act to give effect to public opinion or that which Swalec's customers might find helpful. It was a matter for Parliament. R v Bhagwan (1972) AC 60 applied. (4) As statutory bodies, electricity suppliers had only the powers conferred on them by Parliament and anything which may be fairly regarded incidental or consequential thereto. Therefore, the correct approach was to determine the powers of a PES regarding PPMs and any duties relevant thereto. (5) The relevant duty, which was common ground, was the duty to supply electricity on a continuing basis, subject to the qualifications in s.17 of the 1989 Act. A PES was authorised to charge for electricity by s.18 of the 1989 Act. Under s.20(4) of the 1989 Act, a PES had powers to protect it against the risk of non-payment by taking security from customers. A PPM was an alternative to security which the customer could require if security was requested. (6) Schedule 7 para.10 of the 1989 Act threw light on the meaning of PPM. "Meter" was not defined but must have its natural meaning of a meter for measuring the supply of electricity. A PPM was a meter with the added feature that it could accept prepayment. By implication, the meter could also terminate the supply if the prepayment was not made. (7) The only powers which a PES had to recover its charges by a PPM were the powers given to it expressly by the 1989 Act or arising by implication. (8) The provisions of the 1989 Act, properly construed, gave a PES power to recover its charges by means of a meter which measured electricity, accepted payment for electricity, and terminated the supply if there was no such prepayment. That was the limit of the PES's express authority. As a statutory body its powers were not to be construed ungenerously, but for a power to arise by implication it would have to be reasonably incidental to carrying out its functions or consequential thereto. An argument that a power to recover water charges would meet this description could not be maintained. (9) That interpretation brought those provisions into harmony with Sch.7 para.12(2) of the 1989 Act, which prevented a PES from using a PPM to recover charges due to it that were not related to electricity supply. Only such sums were prohibited since an electricity meter could not be used for recovering sums owing to other persons. (10) The court was unable to conclude that the scheme was authorised by the 1989 Act. This was not a case where words had to be added to the Act to achieve that result. It was a case where additional words would have been required in the Act to find in favour of the scheme.

Judgment accordingly.

Chancery Division
Arden J
Judgment date
22 October 1999

​LTL 25/10/99 : Independent, December 6, 1999 : Times, October 28, 1999