Summary

• DCC2 Ltd assumed responsibility for Great Britain's smart meter communications infrastructure on 2 November 2026, replacing Capita-owned Smart DCC Ltd as operator.
• The successor is wholly owned by SECCo and operates under a not-for-profit model with majority-independent governance.
• Ofgem's new price control sets expenditure and delivery expectations in advance, while existing communications services continue unchanged.

The company responsible for Great Britain’s smart meter communications network has transferred to a new not-for-profit operator, placing a central part of the energy system under revised governance and financial controls while retaining the infrastructure and services already in operation.

On 2 November, Data Communications Company services transferred from Capita-owned Smart DCC Ltd to DCC2 Ltd, a wholly owned subsidiary of the Smart Energy Code Company (SECCo). The successor now operates under the second Smart Meter Communication Licence, following changes developed by energy regulator Ofgem.

The transfer introduces majority-independent governance and a not-for-profit operating model, alongside a system in which the regulator determines expected expenditure and delivery requirements before costs are incurred. Under the previous arrangements, the licensed business operated commercially, with much of the scrutiny of its expenditure taking place retrospectively.

For organisations using DCC’s services, the immediate consequences are mainly administrative. The company has confirmed that its existing communications services continue unchanged, with billing and payment arrangements moving to the new licensed entity. Customers do not need to take action to maintain connectivity, and the transfer itself does not change what they are charged for.

Changing ownership of national infrastructure

DCC operates the central communications and data transfer infrastructure used by smart energy meters across England, Scotland, and Wales. The network enables authorised organisations to exchange information with meters, supporting remote readings and other functions associated with Britain’s smart metering system.

Energy suppliers, electricity and gas distribution businesses, and other authorised users depend on those services. Although individual suppliers maintain relationships with their customers, the communications infrastructure must provide consistent connectivity across the wider market, including when households or businesses change supplier.

That national role makes DCC different from an ordinary technology services provider. Its infrastructure serves a regulated market in which participants cannot simply select an alternative national smart meter communications network if they disagree with the licensed operator’s performance or charges.

Ofgem began reviewing the company’s regulatory arrangements ahead of the expiry of its original licence. The process considered how DCC should be governed, funded, and held accountable as smart metering services develop and the requirements placed on the network change.

The regulator selected DCC2 as successor licensee in February 2026 and granted its licence on 14 April. Responsibility for delivering the licensed services formally transferred on 2 November, with the people, operational capabilities, and service arrangements associated with the business moving to the successor organisation.

SECCo’s ownership is intended to align the company more closely with the interests of the wider smart energy system. Majority-independent governance introduces a different oversight structure, while the licence establishes the objectives and obligations against which the operator’s performance can be assessed.

Costs move under upfront regulatory scrutiny

One of the most substantial changes concerns the way Ofgem controls expenditure. The previous arrangements relied on ex-post regulation, under which costs were assessed after they had been incurred. DCC2 will instead operate under an ex-ante framework, with expenditure allowances and expected outcomes established in advance.

The first price control period runs from November 2026 to March 2028. Ofgem has determined the company’s required revenue, allocated funding to specified deliverables, and established mechanisms for particular costs that may require adjustment during the period.

Setting expectations earlier could provide greater clarity about the relationship between expenditure and delivery. It also requires decisions about future costs before all operational requirements are known, particularly where technology maintenance, supplier contracts, or changes to security requirements affect the resources needed.

The regulatory framework therefore provides mechanisms for approved cost drivers and specified additional expenditure. These arrangements allow the company to respond to certain changing circumstances while remaining accountable for how money is used.

For energy suppliers and other users, more predictable expenditure can assist financial planning. The wider economic outcome will depend on whether the framework encourages efficient investment while preserving the reliability and security of the network.

Not-for-profit ownership does not eliminate the cost of maintaining infrastructure or guarantee lower charges. DCC2 still needs to procure technology, manage external suppliers, employ specialist staff, and invest in equipment and systems capable of meeting its licence obligations.

Continuity across connected energy systems

The transition also brings operational responsibilities that extend beyond billing and governance. DCC’s communications infrastructure depends on distributed equipment, telecommunications services, central systems, and the controls used to authenticate access to smart meter functions.

Because the network supports services across the energy market, interruptions can affect the exchange of information between meters and authorised users. Maintaining availability consequently requires coordination across technical suppliers, communications providers, and the organisations that depend on the service.

The transfer was designed to preserve existing operational capabilities rather than replace the underlying communications infrastructure. The new entity is responsible for continuing those services while implementing the revised governance and financial arrangements.

Longer-term decisions will involve technology maintenance and replacement, including how existing equipment should be supported as smart energy services evolve. Ofgem’s new framework requires DCC2 to develop a business strategy and technology roadmap, giving the regulator and industry a basis for examining future investment requirements.

Those decisions may include changes to infrastructure, software, and service capabilities, although individual developments will require separate technical and commercial assessment. New applications cannot be introduced solely through changes to the operating company’s ownership.

The roadmap will also need to address dependencies on suppliers and the resilience of services already in use. The organisation’s operating model may have changed, but the technical requirements associated with maintaining secure national communications remain.

With the transfer completed, DCC2 begins its first price control period under the new licence. Ofgem can now assess its costs and delivery against expectations established in advance, while the company continues operating the smart metering network used across Great Britain’s energy system.