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

Proposer David Lyons
Lead Analyst SEC Change
Date raised 06/12/2018
StageImplemented
Implementation date 28/01/2019
Latest update This modification was implemented on 28 January 2019.

What is the issue?

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.

What is the solution?

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.

Who is impacted?

Supplier Parties

Other SEC Parties

The DCC

What SEC documents are affected?

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

Modification documents

SECMP0068 Authority Decision
25/01/2019
SECMP0068 Change Board vote
07/01/2019
SECMP0068 Modification Report
07/01/2019
SECMP0068 Modification Report Consultation responses
27/12/2018
SECMP0068 Modification Report Consultation
17/12/2018
SECMP0068 Modification Proposal
06/12/2018
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