Smart DCC costs: A rollercoaster ride

from Cornwall Insight...

The Smart Data and Communications Company (DCC) is responsible for deploying and maintaining the infrastructure to enable the national smart meter roll-out, in collaboration with its service providers. The service is effectively a national monopoly as government has mandated that all suppliers, except those in testing on their way in to the market, use its services. Therefore to drive value for money and to maintain charges that are cost-reflective in the absence of competition, Ofgem regulates the revenues recovered by the DCC using a price control.

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Costs associated with the smart meter roll-out are substantial for suppliers that manage a portfolio of hundreds of thousands, or millions of customers on tight margins. Given the scale of the roll-out, the realisation of additional challenges, and the lack of precedent in this area, it is perhaps understandable that there is flexibility in the price control approach for the DCC, and the subsequent charges. But the fact that fixed internal and external costs for 2018-19 are almost £180mn more than initially expected in the DCC licensing competition underpins the scale of the challenges facing the smart meter roll-out.

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