Substation leases—key issues for landowners and utility companies
Substation leases—key issues for landowners and utility companies

The following Property guidance note provides comprehensive and up to date legal information covering:

  • Substation leases—key issues for landowners and utility companies
  • Introduction and background
  • Approach to negotiation
  • Key provisions
  • Alterations and equipment
  • Access
  • Rights granted
  • Repair and statutory compliance
  • Insurance and indemnity
  • Reinstatement
  • more

Introduction and background

This Practice Note highlights key considerations when acting for landowner clients and utility companies (distribution network operators (DNOs)) in connection with the negotiation of substation leases. It also touches on issues for tenant occupiers where relevant.

It should be remembered that the statutory backdrop for substation leases is the Electricity Act 1989 (EA 1989). While the scope of this statute is outside the terms of this Practice Note (see instead Practice Note: Electricity licensees: street-opening and necessary wayleaves — What are ‘necessary wayleaves’?) its importance is that it gives operators the statutory right to install and retain their equipment regardless of any lease terms agreed.

For developers, obtaining a power supply can be a bureaucratic and lengthy process with the cost and timescale depending upon what other applications for power have been made at the same time.

These factors mean that the landowner can be in a weak negotiating position.

Approach to negotiation

Operators will often issue standard form leases and attempt to avoid negotiation. It would not be usual to produce a full mark up of a draft lease as one would for a standard commercial letting. However, it is unlikely to be appropriate to accept a lease as drawn without any amendments. How you approach the draft lease will depend upon your client’s instructions, the