Submission in response to the Australian Energy Market Commission’s (AEMC) draft determination on the Demand Management Incentive Scheme Rule 2015

Overall PIAC agrees with the AEMC’s new framework of separate provisions for a demand management incentive scheme (DMIS) and demand management innovation allowance (DMIA) (as an R&D allowance) with separate objectives. PIAC makes three specific recommendations however. First, PIAC is concerned about the discretion awarded in the draft rule to the AER as to whether or not it wishes to apply the DMIS and DMIA in network determinations and recommended that the AER be required to apply the DMIS and DMIA to all networks. Second, PIAC recommends that the AER be required to publish a DMIS and DMIA within 9 months of the publication of the final rule, and to introduce them into revenue determinations by 1 July 2016 via transitional arrangements. Third PIAC recommends that the AER be required to publish DM Guidelines (including reporting requirements for DMIS and DMIA programs and projects with performance metrics).