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 12 by the following DNSPs:
The DNSPs sought approval of total expenditures of around $2.2 million relating to 22 demand management projects. The AER has reviewed and approved the expenditure claimed by the DNSPs as the expenditure is consistent with the DMIA criteria. Energex and SA Power Networks did not seek approval of any DMIA expenditures.
To date, the non-Victorian DNSPs have only utilised a small proportion (around 14%) of their 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 original allowance.
Upon receipt of the Victorian DNSPs’ 2012 DMIA reports, the AER intends to update its 2011 12 DMIA report to include the assessment of the DMIA expenditures claimed by the Victorian DNSPs for 2012.