Ofgem decision on increasing DCC’s revenue at risk


The Data Communications Company (DCC) is responsible for managing the smart metering infrastructure and Smart DCC Ltd is the current licensee. In October 2020, Ofgem consulted on increasing the revenue at risk against DCC’s operational performance incentives such that it is equal to the sum of DCC’s Baseline Margin (BM) and External Contract Gain Share (ECGS) in each year from Regulatory Year 2021/22 onwards. This would increase DCC’s incentive to perform well against the Operational Performance Regime (OPR) and deliver a high quality service.

Ofgem has sets out its decision to increase DCC’s revenue at risk by the full value of ECGS in each regulatory year across all three incentive areas of the OPR, see the film decision document here. However, given Ofgem’s proposals as part of the OPR Guidance consultation that Regulatory Year 2021/22 will be part of a transition phase for the System Performance incentive, we consider it appropriate to delay increasing the revenue at risk to Regulatory Year 2022/23.

In addition, the document sets an intention to conduct a further consultation to review the ECGS incentive framework to explore how to expand the scope, as well as consult on the process for amending the revenue at risk against the OPR.


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