SECMP0043 'Modification to Services Force Majeure Provisions'

In April 2018, Ofgem implemented the Data Communications Company (DCC) Operational Performance Regime (OPR) through modification to the Smart Meter Communication Licence (DCC Licence). The key principles underpinning the design of the OPR performance measures are consistent with the Performance Measures in SEC Section H13. The OPR places performance incentives on the DCC by placing 100% of the value of DCC’s smart meter related margin at risk.

Following a review of current regulation, the DCC believes that neither the OPR or the SEC provide an application process for the DCC to apply for relief for ‘all categories’ of exceptional events (events outside the DCC’s control). In the absence of a process for a broader concept of exceptional events in the SEC, the DCC believes there is a risk that it will be unfairly penalised under the OPR for delayed or non-delivery of DCC services due to events outside its control.

An application process does exist under SEC Section M3 for Services Force Majeure (FM) under which the DCC can apply to the SEC Panel for relief for delayed or non-delivery of DCC Services. However, Services FM is narrowly defined and only applies to a limited number of exceptional events, such as acts of terrorism or war; it does not apply to all events outside the DCC’s control.

The proposed solution is to introduce a new application process under SEC Section H, which the DCC and the Panel would follow if the DCC wishes to claim relief for exceptional events for its OPR reporting. This new process is distinct from the existing Services FM application process. It introduces a broader concept of ‘exceptional event’ under a new definition of OPR Exceptional Event and sets out the relief application process. This solution would apply only to the DCC’s reporting under the OPR, and not to the DCC service provider reporting under SEC Section H13.