The Demand Management Incentive Scheme (DMIS) aims to provide incentives for Distribution Network Service Providers (DNSPs) to conduct research and investigation into innovative techniques for managing demand. It also aims to enhance industry knowledge of practical demand management projects and programs through the publication of annual reports. At the end of each regulatory year 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 2012‑13 by the following non-Victorian DNSPs:
- ActewAGL (ACT)
- Ausgrid (NSW)
- Endeavour Energy (NSW)
- Ergon Energy (Qld)
- Essential Energy (NSW)
- TasNetworks (TAS)
The AER’s final decision also includes its review of claimed DMIA expenditures in 2013 by the following Victorian DNSPs:
The DNSPs sought approval of total expenditures of more than $4.3 million, which represents a 50 percent increase in expenditure from the previous period. The AER has approved the expenditure claimed by the DNSPs as the expenditure is consistent with the DMIA criteria. Citipower, Energex and SA Power Networks did not seek approval of any DMIA expenditures for this reporting period.
To date, the DNSPs have spent less than a quarter of their total DMIA allowances. 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 approved allowance.