(1) Whenever a generating station is transferred to a joint electricity authority they shall be under an obligation—

1. (a) thenceforth to supply to the authority, company, or person from whom it is transferred such quantity of electricity as may he required for the purposes of the undertaking for which the generating station was established and as regards the amount that could have been generated at the generating station by that authority, company, or person at a price not greater than the cost at which it could have been so generated; and
2. (b) in the event of any change in the type of current frequency or pressure, to pay such expenses as the authority, company, or person may necessarily incur in consequence of such change;

and if any question arises as to such amount or cost or expenses the question shall be determined by the Electricity Commissioners, and in determining such cost regard shall be had to capital charges (including interest on capital), cost of fuel and labour, and other costs of generation, and to any reduction of cost which might reasonably have been expected to accrue from any improvement of the generating station and plant therein.