Response to the Consultation on Alternative
Home Area Network (HAN) Solutions
Please use this template to respond to the consultation. It will help us to record and
take account of your views.
You may choose to respond to some or all of the questions. Please provide evidence
for your answers where possible.
Your details
Your name:
Bushra Ali
Company/Organisation name:
Smart DCC
Email address:
[email protected]
Postal address:
Smart DCC
2nd Floor
Ibex House
42-47 Minories
London
EC3N 1DY
Telephone no.
07882042883
Would you like this response to
remain confidential?
If yes, please state your reasons:
No
The deadline for receipt of your response is 25 February 2016.
Please email your response to [email protected]
Alternatively you can send it by post to:
Smart Metering Implementation Programme - Delivery
Department of Energy & Climate Change,
1st Floor Area 1C,
3 Whitehall Place,
London, SW1A 2AW
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Chapter 2 - Alternative HAN Principles
Mandate to use Shared Solution
Q1
Do you agree with the proposal that we do not need to mandate the use of
the collective solutions?
No comment
Non-Domestic Suppliers
Q2
What role do you think Alternative HAN will play in the non-domestic sector?
We would welcome evidence and views from stakeholders on the role of
Alternative HAN in the non-domestic sector.
No comment
Scope of Regulation
Q3
Do you agree with the proposed scope of regulation on Alternative HAN?
No comment
Chapter 3 - Alternative HAN Delivery Models
Q4
Do you agree that we should proceed with Model A? Please provide
evidence to support your position.
No comment
Chapter 4 - Alternative HAN Regulatory Principles
Licence Conditions
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Q5
Do you agree with the proposed amendments to the DCC Licence?
Agree:
DCC broadly supports the proposed amendments to the DCC licence. However,
there are certain aspects of the proposed legal drafting which we consider require
further review. These relate to the proposed charging arrangements and our
comments are set out in our response to the Alt HAN charging questions (questions
12 – 14).
Q6
Do you agree with the proposed drafting for supplier licence conditions? Do
you agree with the proposal to include a process for suppliers to apply to
Secretary of State / Ofgem for exemptions where the costs are prohibitively
expensive?
No comment
Governance Body
Q7
Do you agree with the policy proposals and legal drafting for the Forum?
Agree:
DCC recognises that there will need to be close engagement between DCC and the
Alt HAN Forum. We consider that there should be representation from DCC at the
Forum, in particular for input and support on issues relating to the proposed
charging arrangements. Furthermore, we anticipate that we may need to provide
support on technical compatibility issues, such as scenarios in which changes/
enhancements are required to the DCC solution to ensure Alt HAN equipment is
compatible with DCC devices.
Q8
Which of the Forum voting options (1 or 2) do you prefer? Are there any
alternative voting mechanisms you would propose, for example that provide
for a greater number of votes for non-domestic suppliers during mass rollout?
No comment
Contracting Vehicle and Secretariat
Q9
Do you agree with the policy proposals and legal drafting for the Alternative
HAN Company?
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No comment
Q10
Do you agree with the policy proposals and legal drafting for the Alternative
HAN Secretariat?
No comment
Modifications
Q11
Do you agree with the policy proposals and legal drafting in regards to
modifications?
No comment
Alternative HAN Charging
Q12
Do you agree with the policy proposals and legal drafting in regards to the
enduring Alternative HAN Charges?
Agree:
DCC broadly agrees with the proposal set out for the enduring Alternative HAN
charges.
However, DCC considers that there may be a case for not introducing regional
pricing for Alternative HAN Charges for non-domestic metering points for the
following reasons:
 According to the latest registration data the proportion of all non-domestic
meter points is less than 10% (c. 5m/52m). As the Alt HAN solution is
expected to serve approximately 3.5%% of the GB premises. DCC
anticipates that the number of non-domestic meter points that may require Alt
HAN solutions will be a much smaller proportion of the total. However we do
recognise that this view is subject to further research and analysis.
 The only significant differentiator of DCC’s costs between regions is as a
result of the different CSP solutions employed in each region. There is no
indication/evidence that Alt HAN solutions (and therefore costs) will vary
between Regions.
 Whilst Alt HAN Services are not DCC’s Mandatory Business, and therefore
the Third Relevant Policy Objective in the DCC Licence does not directly
apply, DCC considers that the principle of part (d) should be applied to Alt
HAN Charges (i.e. that the cost of implementing the Charging Methodology
should be taken into consideration). For DCC the removal of regional pricing
will reduce the impact on the DCC billing system and the simplicity of the
DCC Charging Statement.
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As a result we suggest that the charging methodology set out in the transition
approach of this consultation is continued in the enduring process; this keeps the
process simple and clear for users of Alt HAN services and DCC. It also means
there will be a single rate for charging groups g1 and g3 for both domestic and
non-domestic across all regions. DCC will continue to review the charging
methodology in each regulatory year (required under DCC’s licence (LC18.7)) to
ensure it continues to be fit for purpose and is consistent with the Relevant Policy
Objectives of the Charging Methodology.
In relation to section K3.20, it would be useful if further clarification/definition was
provided for the term usage and whether it refers to the number of devices or the
amount of traffic consumed by a meter point. DCC considers that the more suitable
approach is the one based on the number of Meter Points.
DCC broadly agrees with the approach set out for Explicit Charges. DCC
recognises that there may be a need to amend the Charging Statement during the
course of the year should Alt HAN Co have the need to change the charges during
the year. DCC assumes the Explicit Charges will be set by Alt HAN Co and
provided to DCC by 1 December each year (see response to question 14 point (a).
We have identified a potential drafting omission in relation to K7.3 – we suggest
that SECCO cost in respect of Security and Privacy Assessments is added to the
list of service providers to whom DCC pays.
Q13
Do you agree with the policy proposals and legal drafting in regards to
transitional charging?
Agree:
DCC broadly agrees with the transitional charging proposals. Please see our
response to question 14 for our points in relation to simplifying the charges to cover
both domestic and non-domestic suppliers.
Q14
Do you agree with the policy proposals and legal drafting in regards to
Alternative HAN budgeting and invoicing?
Agree:
DCC broadly agrees with the proposal relating to Alt Han budgeting and invoicing.
DCC suggest the following are taken into consideration at the timing of the
budgeting process:
(a) Section Z4.21
DCC needs to issue a draft of its annual Charging Statement by 31 December in
each year, therefore in order to avoid unnecessary estimation and subsequent inyear changes due to estimation, DCC recommends that Alt HAN Co submits its
final budget and Explict Charges to DCC by 1 December each year.
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DCC recognises that Alt HAN Co will have the capability to make in-year
amendments to its budget. DCC would suggest that in-year changes are subject to
a materiality threshold. Under its licence, DCC must provide 3 months’ notice
before making any changes to Service Charges. Furthermore, under its licence
(LC36.5), DCC must set charges at a level which avoids the need to amend
charges in-year in order to provide certainty to its Users.
(b) First Budget in 2016
DCC suggests that Alt HAN Co shares the budget at least four months in advance
of establishment, to give DCC sufficient time to make the necessary arrangements
to prepare its revised in-year amended Charging Statement and comply with the 3
month notice period required under the licence. Whilst DCC may seek to have the
3 month notice period reduced by Ofgem, this should be avoided where possible.
(c) Section Z1.28
SEC introduces the concept of Relevant Preceding Period for incorporating
volumes in the Supplier Weighted Vote formula. For other charges, DCC collects
and tracks volumes by Charging Period, i.e. 16th Month x to 15th Month x+1. As a
result, DCC recommends that for consistency this is amended to reflect volumes
from a Charging Period rather than Relevant Preceding Period.
(d) Section Z4.7
DCC recommends Alt HAN Co’s invoicing profile follows a smooth profile i.e.
equally spread out across 12 months in accordance with the budget it provides, this
can reduce the possibility of peaks in invoices. This will align with the uniform
pricing approach that DCC is required to follow under Section K of the SEC.
(e) Section Z4.20
DCC currently uses the volume as at the 15th of each month for billing purposes
(this is the end of the Charging Period). DCC suggests that Alt HAN Co provides its
volume to be used by DCC for billing suppliers no later than 5 working days
following the end of the Charging Period to provide sufficient time for DCC to
process the volume, pass the necessary controls and governance and then
process via the billing system to generate invoices.
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