Under the Demand Management Incentive Scheme (DMIS), at the end of each regulatory year electricity distribution network service providers (DNSPs) are required to submit a report to the AER on their Demand Management Innovation Allowance (DMIA) expenditure. The AER conducts an assessment of the expenditure incurred by the DNSP to ensure compliance with the DMIA criteria and entitlement to recover expenditure.
The following DNSPs claimed DMIA expenditures in 2010–11:
- ActewAGL (ACT)
- Ausgrid (NSW)
- Endeavour Energy (NSW)
- Energex (QLD)
- Ergon Energy (QLD)
- Essential Energy (NSW)
The DNSPs sought approval of expenditures of around $1 million, covering 12 projects. The AER has decided to approve the expenditure claimed by the DNSPs in 2010–11 as the expenditure is consistent with the DMIA criteria.
Despite the number of projects undertaken in 2010–11 the DNSPs have utilised only a small proportion (around 5%) of the DMIA allowance available to them. It is noted, however, that the DMIS provides DNSPs with considerable flexibility as to the profile of the expenditure over the regulatory period as long as the expenditure meets the criteria and does not exceed the original allowance. In the next regulatory control period, when the DMIA expenditure results of the current regulatory period are known, a single adjustment will be made to return the amount of any underspend or unapproved amounts to customers.