Operational Arrangements and Material Assets
Every authorised person. Section A applies to everyone holding a heat network authorisation, whether they operate the network, supply heat over it, or both.
What this condition requires
Act at all times in a responsible manner calculated to secure that operational arrangements, including in relation to Material Assets, safeguard the continuity of each regulated activity efficiently and effectively and minimise consumer detriment — including if the activity ceases or an event in A15 paragraph 15.1.2 occurs (12.1, the continuity objective). Maintain appropriate legally enforceable rights in relation to Material Assets, by ownership or otherwise, subject to permitted security interests — these are the relevant interests (12.2). Ensure those relevant interests remain capable of transfer to a Successor without requiring third-party consent, approval or agreement except where required by legislation, and without the Successor being unreasonably disadvantaged or subject to materially different terms (12.3); where third-party consent is needed, 12.4-12.5 set out when you are treated as compliant. A12 compliance must also be evidenced in the A14 continuity plan.
The condition in full
Reproduced from Ofgem’s Heat Network Authorisation Conditions decision, January 2026, Appendix 2.
Operational Arrangements
12.1 The authorised person must at all times act in a responsible manner that is calculated to secure that its operational arrangements, including in relation to the Material Assets, safeguard the continuity (in an efficient and effective manner that minimises the risk of Consumer detriment) of each regulated activity that it is authorised (or treated as authorised) to carry on, including in the event that it ceases to carry on any such activity or it is affected by any of the events set out in paragraph 15.1.2 of authorisation condition A15 (Revocation) (the "continuity objective") .
Legally enforceable rights over Material Assets
12.2 The authorised person must at all times act in a responsible manner that is calculated to secure that it has and maintains, subject to any permitted security interests, appropriate legally enforceable rights (whether by way of direct ownership or otherwise) in relation to the Material Assets (with such rights as held by the authorised person from time to time being the authorised person's "relevant interests").
Relevant interests to be capable of transfer
12.3 Subject to paragraphs 12.4 to 12.5 and to any permitted security interests, the authorised person must at all times act in a responsible manner that is calculated to secure that its relevant interests are capable of transfer to any Successor, without either:
12.3.1 any requirement for consent, approval or agreement from or by a third party except where any such requirement arises from legislation; or
12.3.2 the Successor being unreasonably disadvantaged or, if applicable, subject to materially different terms.
12.4 Where a third party's consent, approval or agreement must be obtained to enable the transfer of a relevant interest to a Successor, the authorised person will be treated as complying with paragraph 12.3 if such third party is legally obliged to provide its consent, approval or agreement subject only to conditions that are reasonable in all the circumstances of the case in the context of the continuity objective.
12.5 The authorised person need not ensure that a relevant interest is capable of transfer in accordance with paragraph 12.3 if, having considered all the circumstances of the case, the authorised person has satisfied itself that:
12.5.1 the relevant interest is of a type that is not legally capable of transfer; or
12.5.2 the fact of the relevant interest not being capable of transfer in accordance with paragraph 12.3 does not create an undue risk of the continuity objective not being met.
Disposals and security interests
12.6 The authorised person must not:
12.6.1 create (or allow to be created) a security interest over; or
12.6.2 liquidate, sell or otherwise dispose of,
any relevant interest where doing so, having regard to the circumstances and the terms of the arrangements, would create an undue risk of the continuity objective not being met. For the purposes of this condition, a "security interest" means a mortgage, pledge, lien, security interest or other charge or encumbrance or other agreement having the same economic effect and "permitted security interest" shall be construed as a security interest that is not prohibited in accordance with this paragraph 12.6.
72 Decision Heat networks regulation: authorisation conditions
Register of Material Assets
12.7 By the end of the first part of the initial period, the authorised person must create and thereafter maintain a register of all Material Assets which shall, as a minimum, include appropriate, accurate and readily accessible information about the Material Assets including, in respect of physical assets, their condition and function (as applicable). The authorised person must upon request provide the Material Asset register to the Authority at any time after the first part of the initial period has ended.
Application of this authorisation condition
12.8 This authorisation condition shall not apply where the authorised person:
12.8.1 is a Local Authority or, an Excepted Company; or
12.8.2 carries on regulated activities only in relation to relevant heat networks that are either Industrial Heat Networks or Self-Supply Networks,
and where the authorised person carries on one or more regulated activities in relation to Industrial Heat Networks or Self-Supply Networks in addition to carrying on one or more regulated activities in relation to any other relevant heat network, this authorisation condition shall be construed as if it does not apply to the authorised person's activities in relation to, or Material Assets that relate to, Industrial Heat Networks or Self-Supply Networks.
73 Decision Heat networks regulation: authorisation conditions
Does this apply to you?
Section A applies to every authorised person, so this condition applies to you regardless of whether you operate the network, supply heat over it, or both. The registration checker works out your full set in a few questions. Registration closes on 26 January 2027.