Financing arrangements for DCC1 and DCC2 during Business Handover

Financing arrangements for DCC1 and DCC2 during Business Handover | Ofgem Please enable JavaScript in your web browser to get the best experience. BETA This site is currently in BETA. Help us improve by giving us your feedback . Close alert: Financing arrangements for DCC1 and DCC2 during Business Handover Publication type: Consultation Publication date: 24 October 2025 Last updated: 19 December 2025 Closed date: 25 November 2025 Status: Closed (awaiting decision) Topic: Metering Subtopic: Data Communications Company (DCC) Show all updates Print this page Related links DCC Review Phase 2: Determination of Allowed Revenue - conclusions Modifications to the Smart Meter Communication Licence for transition to ex-ante cost control and other changes required for licence closure: decision Draft new Smart Meter Communication Licence Licences and licence conditions Share the page Share on Facebook Share on Twitter Share on LinkedIn We are seeking views on policy proposals and associated draft Licence changes to facilitate cost recovery for the current Smart Meter Communication Licensee (DCC1) and the Successor Licensee (DCC2), and to ensure financial security during a Business Handover period. Details of outcome We proposed to modify the Smart Meter Communication Licence in two ways to: expand the definition of Pass-Through Costs to create a pathway for the Successor Licensee to recover legitimate Business Handover costs before it can levy its own service charges impose a duty on the current Licensee to temporarily ringfence the profit elements of its Allowed Revenue in the final two Regulatory Years pending Ofgem’s final determination of the Licensee’s Allowed Revenue to ensure sufficient funds are available to meet any liabilities that may arise Having considered the feedback, we have decided to proceed with the first proposal, to expand the definition of Pass-Through Costs. The licence changes will take effect on 16 February 2026. We will implement further changes to the conditions of the Successor Licence, expected in March 2026. Extension to statutory consultation As some respondents requested more time to make additional representations, we are extending the consultation period on the second set of proposals linked to liabilities. Read the December 2025 notice and original consultation at the bottom of the page. The deadline to make additional representations is 16 January 2026. Read the full outcome Decision: Financing arrangements for DCC1 and DCC2 during Business Handover [PDF, 248.26KB] Consultation responses: Financing arrangements for DCC1 and DCC2 during Business Handover [ZIP, 1.03MB] Smart meter communication licence with final modifications: December 2025 [PDF, 1.92MB] Notice of smart meter communication licence modifications: December 2025 [PDF, 137.69KB] Original consultation Consultation description This consultation is part of the DCC review programme, through which we are reviewing the regulatory framework for the Data Communications Company (DCC) to put in place new arrangements following the expiry of the Smart Meter Communication Licence in 2027 and appointing the Successor Licensee. This is a combined policy and statutory consultation. It sets out proposals for modifications to the current SMCL and changes to the draft Successor Licence to ensure that both DCC1 and the DCC2 can recover necessary costs and to manage financial liabilities during the handover period. The proposals are primarily of technical nature, aiming to clarify the processes that both Licensees will be expected to follow. We propose changes to the SMCL and draft Successor Licence to: allow DCC2 to recover Business Handover costs before the Transfer Date via DCC1’s Allowed Revenue enable DCC1 to recover costs for mandatory activities after the Transfer Date through DCC2’s Required Revenue clarify arrangements for transferring and ringfencing funds between DCC1 and DCC2 pending our final Price Control decision We expect to publish our decision in December 2025. Who should respond This consultation is aimed at: Smart DCC (the current holder of the Smart Meter Communication Licence) DCC customers, including energy suppliers, distribution network operators, customer groups and other users of the smart metering network parties applying to be the holder of the Successor Licence organisations and individuals with an interest in smart metering policy and regulation Main document Financing arrangements for DCC1 and DCC2 during Business Handover statutory consultation [PDF, 303.69KB] Subsidiary documents Notice of statutory consultation - SMCL changes December 2025 [PDF, 175.95KB] Notice of statutory consultation - SMCL changes October 2025 [PDF, 183.22KB] Smart Meter Communication Licence - proposed changes October 2025 [PDF, 1.95MB] Print this page Related links DCC Review Phase 2: Determination of Allowed Revenue - conclusions Modifications to the Smart Meter Communication Licence for transition to ex-ante cost control and other changes required for licence closure: decision Draft new Smart Meter Communication Licence Licences and licence conditions Share the page Share on Facebook Share on Twitter Share on LinkedIn All updates 19 December 2025 added decision document on first proposal, consultation responses, smart meter communication licence with final modifications and notice giving effect, extended consultation period on second proposal to 16 January 2026 and added notice to subsidiary documents. 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