The AEMC has expedited a new rule so that customers can start to benefit early from the demand management incentive scheme (DMIS).
This scheme encourages network businesses to use alternatives to building more expensive poles and wires in the system. Alternatives can include demand response and distributed generation (including rooftop solar and batteries) where these can address system constraints at the least cost to consumers.
Over the long term, the demand management incentive scheme will promote more efficient investment in network services which will flow through to consumers as lower network prices.
From 10 April 2018, the expedited rule will incentivise distribution network service providers to start proposing new, innovative solutions to meet customer demand for network services. Under the DMIS network businesses may submit proposals for approval by the Australian Energy regulator (AER).
For example, the DMIS may incentivise a network business to source a demand management solution, like factories turning off during peak periods, as an alternative to building new poles and wires.
Starting the DMIS early means customers can benefit earlier from this initiative first flagged by the AEMC’s power of choice review.