REG - OFGEM Capita PLC - Ofgem final decision on DCC cost allowances

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RNS Number : 1288W  OFGEM  11 March 2026

In November 2025, Ofgem consulted on the proposals for the Data Communications
Company (DCC) Price Control submission for the Regulatory Year 24/25
(RY24/25).

Today (Wednesday 11 March 2026), Ofgem is publishing its final decision in
regard to both consultations.

DCC is the central communications body appointed to manage communications and
data transfer for smart metering and holds the Smart Meter Communication
Licence.

Price Control arrangements restrict DCC's revenues to ensure that costs
incurred are economic and efficient. Ofgem proposes to disallow incurred
costs of £11.245m for Regulatory Year 2024/25.

Ofgem's decision is explained in more detail in the following Executive
Summary, also attached in PDF format:

Executive summary

DCC performs a critical role in the energy market, and it is essential that it
is funded to deliver high‑quality, value‑for‑money services. It is
through the Price Control that Ofgem seeks to strike the right balance between
enabling necessary investment to maintain and improve service quality and
ensuring that DCC operates economically and efficiently.

The assessment of DCC's costs is carried out in accordance with the principles
set out in our Price Control Guidance.2 (#_bookmark3)  This Decision Document
sets out3 (#_bookmark4)  our final determinations for the DCC Price Control
for Regulatory Year 2024/25 (RY24/25). 4 (#_bookmark5)  It includes our
conclusions on internal and external costs, performance incentives,
adjustments to Baseline Margin values, and the External Contract Gain Share
mechanism. Our decisions are informed by our initial assessment, the
consultation published in November 2025, the responses received from seven
stakeholders, and additional evidence provided throughout the process.

At the consultation stage, we identified several areas of Unacceptable Costs
and proposed a disallowance of £30.841m. Following consultation, stakeholders
have provided a range of new information and views, and DCC has provided
additional credible evidence demonstrating that some of these costs were
incurred economically and efficiently. We have therefore revised our decision
on disallowances downwards where appropriate, while maintaining the view that
some areas of cost remain unacceptable.

In line with the Licence, we have examined whether such costs should be
disallowed or addressed through undertakings from DCC. Under LC37.8-37.9, we
may accept or reject an undertaking and expect any such proposal to deliver
outcomes equivalent to, or better than, a disallowance. We have decided to
accept one of the three undertakings, in lieu of a disallowance in order to
drive supply chain efficiencies. We are exercising our right under the Licence
to accept this undertaking, and we have determined that doing so will deliver
the greatest long‑term benefit to consumers.

Considering all adjustments together, our final decision for RY24/25 is to
disallow

£11.245m.

 

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