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New rules for a demand management incentive scheme

On Thursday last week, the AEMC announced a final rule to the demand management incentive scheme with the aim to “encourage electricity distribution networks to make efficient decisions in relation to network expenditure, including investment in demand management.”.

The rule includes the introduction of separate objectives and principles to guide the AER in developing and applying an effective incentive scheme and innovation allowance, with the announcement stating “the rule amends the existing demand management incentive scheme arrangements to provide greater clarity to the Australian Energy Regulator and stakeholders in respect of how a demand management incentive scheme and a demand management innovation allowance should be designed and applied.