PIAC responded to the AEMC’s consultation on a rule change to extend the Demand Management Incentives Schemes (DMIS) and Demand Management Innovation Allowance (DMIA) to apply to transmission businesses.
We support the rule change and note that where transmission businesses have utilised demand management as a non-network option to defer or avoid network investment significant savings have accrued to consumers. Consequently, we contend that strengthening the incentive for transmission businesses to pursue non-network options through the DMIS should lead to further savings for consumers and help to prevent the continued growth of Regulated Asset Bases.
We note that the AER approved an innovation allowance very similar to the DMIA as part of TransGrid’s 2009-14 and 2014-18 revenue determinations. We suggest formalising such an allowance would be beneficial to all stakeholders.
We also note the extension of the DMIS and DMIA to transmission businesses would help in creating a diverse and readily accessible pool of demand response in each NEM region.