Modifications to the Smart Meter Communication Licence for transition to ex-ante cost control and other changes required for licence closure: decision
Summary
Ofgem decides on modifications to the Smart Meter Communication Licence for transition to ex-ante cost control and other changes required for licence closure.
Why it matters
Implements the transition arrangements ahead of the DCC Successor Licence in 2027. Ex-ante cost control replaces the historic pass-through; this decision moves DCC's cost recovery into a more disciplined regime in the final years of the current licence.
Areas affected
Related programmes
Memo
Modifications to the Smart Meter Communication Licence for transition to ex-ante cost control and other changes required for licence closure: decision | 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: Modifications to the Smart Meter Communication Licence for transition to ex-ante cost control and other changes required for licence closure: decision Publication type: Decision Publication date: 4 July 2025 Topic: Metering Subtopic: Data Communications Company (DCC), Smart meters Decision for: Modifications to the Smart Meter Communication Licence for transition to ex-ante cost control and other changes required for Licence closure Print this page Related links DCC Review Phase 2: Determination of Allowed Revenue - conclusions Share the page Share on Facebook Share on Twitter Share on LinkedIn 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. This is a decision on interim changes to the Smart Meter Communication Licence to support our policy conclusions on transition to a new cost control regime and to help administer the final Price Control at the end of the Licence term. Background The Data Communications Company (DCC) manages the communications and data transfer service for smart metering. DCC operates under the Smart Meter Communication Licence (the “Licence”) which is due to expire in September 2027. We are reviewing the regulatory arrangements for DCC ahead of the Licence expiry (“DCC review”). In December 2024 we published a policy consultation focused on the process for determination of the Licensee’s Allowed Revenue (cost control). We concluded that consultation on 09 May 2025. Alongside that decision, we published a statutory consultation on licence modifications to support the implementation of our policy conclusions. That consultation closed on 07 June 2025. Our decision This document summarises the responses to our May 2025 statutory consultation and outlines our decisions on the proposals we sought views on. We have decided to modify the Licence to: give effect to our conclusions on the implementation of the ex-ante process for determination of DCC’s Allowed Revenue under the Successor Licence amend the dates in respect of certain reporting requirements, including the Price Control submission, in the Licence to account for the Transfer Date amend the Baseline Margin Adjustment and External Contract gain Share mechanisms make a small number of housekeeping changes Main document Statutory decision on interim SMCL changes (July 2025) [PDF, 273.60KB] Subsidiary documents Notice of Modification of the conditions of the Smart Meter Communication Licence (July 2025) [PDF, 373.02KB] SMCL with final modifications (July 2025) [PDF, 1.90MB] Print this page Related links DCC Review Phase 2: Determination of Allowed Revenue - conclusions Share the page Share on Facebook Share on Twitter Share on LinkedIn Close