Rule Change: Completed
On 3 April 2018 the Australian Energy Market Commission (Commission) made a rule change to allow early application of Demand Management Incentive Scheme (Scheme). It is scheduled to commence on 10 April 2018.
The final rule allows distribution network service providers (DNSPs) to apply to the AER for application of the Scheme during their current regulatory control periods. As a result, the application of the Scheme no longer has to be delayed until the commencement of the DNSPs next regulatory control periods.
The final rule will allow for the benefits of the Scheme to be realised sooner than otherwise possible without incurring significant additional costs. The Commission considers that the Scheme promotes efficient investment in network services. It does this by providing incentives for network businesses to use alternatives to ‘poles and wires’ where these can address system constraints at the least cost to consumers. Its earlier application is therefore likely promote efficient investment from an earlier timeframe. This is likely to benefit consumers by reducing total network costs which will be passed through to consumers through lower network prices. These benefits will outweigh the minor administrative costs associated with earlier application. The Commission therefore considers that the Rule will, or is likely to, contribute to the achievement of the national electricity objective.
On 14 December 2017, the AER published the Scheme and at the same time submitted a rule change request to the Commission seeking to allow early application of the Scheme. The proposed rule change sought to amend chapter 11 of the Rules to allow a DNSP to apply to the AER for application of the Scheme during its current regulatory control period.
Under the Rules the Scheme was due to start at the beginning of the next regulatory control period. The next regulatory control period for some jurisdictions is two to three years away and waiting for the next regulatory control period would result in customers having to forgo the opportunity to benefit promptly from the Scheme.
On 20 February 2018, the Commission published a consultation paper. Submissions to the consultation paper were due 20 March 2018. The Commission received six submissions in total.
The rule change process
The Commission assessed the rule change request to be non-controversial and carried out the rule change under the expedited rule change process, subject to any written requests not to do so. The closing date for receipt of written requests was 6 March 2018. No requests to expedition of this rule change process were received.View less