Ofgem has published a draft direction which outlines an updated framework for the Data Communications Company’s (DCC) performance incentives.
DCC is responsible for managing the smart meter network, including the transfer of data, and for delivering the central switching service which will be a fundamental part of faster energy switching.
The energy regulator previously revealed plans to include customer service incentives within its operational performance regime (OPR).
Ofgem is now consulting on a revised OPR framework, including proposals for incentivising DCC’s system performance under four new outcome-based measures, broken down by meter type and region where relevant.
The regulator has also proposed incentivising DCC under two new areas that it says have “caused concern” among DCC’s stakeholders: engagement with customers, and contract management and procurement.
Customer engagement
Ofgem proposes to place a “relatively small” proportion of its margin at risk against the quality of its customer engagement. Performance would be assessed based on submissions from both DCC and the Smart Energy Code panel.
Contract management and procurement
Ofgem is proposing that the assessment of DCC’s handling of contract management and procurement is carried out by an independent auditor, with performance measured against qualitative metrics based on the National Audit Office (NAO) framework.
In addition to the two new areas, DCC wants to continue assessing system performance by evolving the current metrics to a set of outcome-based measures which target four areas: install and commission, prepayment, firmware management and service availability.
The draft direction outlines how it would implement the revised OPR through changes to the Smart Meter Communication Licence.
The amended OPR will take effect from April 2021 and a decision is expected in the Autumn.