PIAC made a submission to the Australian Energy Regulator (AER) on its draft Demand Management Innovation Allowance Mechanism (DMIAM) for transmission businesses.
PIAC broadly supports the AER’s draft DMIAM. In particular, we support that it is opex-only, does not include an uplift and the project allowance constitutes only 0.1% of a TNSP’s Maximum Allowed Revenue.
PIAC strongly supports the use of an Independent Advisory Panel with consumer or community representatives in addition to members with relevant technical knowledge. Having both consumer and technical representation on the panel will help ensure projects are both innovative and promote consumers’ interests. The panel should also be used by TNSPs to help build trust in the DMIAM more generally and PIAC recommends TNSPs be required to form an Independent Advisory Panel to review and endorse any innovation projects under the DMIAM. Even without a formal requirement to do so, forming such a panel would be a prudent measure for TNSPs to help maximise the benefits from innovation projects and to minimise the risk that an ex-post review rejects the projects.
