SECMP0068 Alt HAN Company third party rights to enable external financing arrangements

Following direction from the Alt HAN Forum, AltHANCo is investigating possible financing routes to spread and reduce in-year costs for Energy Suppliers. The need for AltHANCo to be given enforceable rights to receive payments from the DCC under the SEC would be required for all financing options. The key issue for this financing arrangement is the ability to assign rights to receive income to the funder, to provide the necessary comfort that their revenue stream is secure. As AltHANCo is not a party to the SEC, it does not currently have an enforceable contractual right to receive payment of the AltHANCo costs from the DCC, and therefore by extension it cannot assign these rights.

This modification gives AltHANCo Third Party Rights to enable it to enforce and assign its rights to receive payments from the DCC. This solution is the simplest, creates assignable and enforceable rights for AltHANCo against the DCC and (with Ofgem consent) licensed suppliers, limits AltHANCo exposure to other SEC obligations and will not bind AltHANCo to the prohibition on assignment of rights (Section M11.8). It also represents a similar approach to that used elsewhere in the Smart Meter programme as the DCC has previously used this structure for its financing activities.

Large Suppliers
Small Suppliers
Other SEC Parties
DCC

Section M ‘General’
Section Z ‘Alt HAN Arrangements’