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 AER has published a final decision following its review of claimed DMIA expenditures in 2011 by the following DNSPs:
- CitiPower (VIC)
- Jemena Electricity Networks (VIC)
- SP AusNet (VIC)
The DNSPs sought approval of total expenditures of around $550,000 relating to 3 projects. The AER has reviewed and approved the expenditure claimed by the DNSPs as the expenditure is consistent with the DMIA criteria. Powercor and United Energy did not seek approval of any DMIA expenditures.
The Victorian DNSPs have only utilised a small proportion (around 5.4%) of the DMIA allowance. 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 July 2012 the AER published a report on its 2010–11 DMIA assessment for ACT, NSW, Qld and SA DNSPs. The AER has now updated its 2010–11 DMIA report to include the assessment of the DMIA expenditures claimed by the above named Victorian DNSPs for 2011.