Service target performance incentive scheme (STPIS) version 2
Under Chapter 6 of the NER, the AER is required to publish, administer, and maintain a Service Target Performance Incentive Scheme (STPIS). The STPIS provides incentives for maintaining and improving performance of distribution network service providers (DNSPs) to the extent that customers are willing to pay for such improvements.
The financial reward or penalty as a result of a DNSP’s service performance outcome is calculated in accordance with the STPIS version 2. This is referred to as the ‘S-factor’.
S-factor calculation model and handbook
The AER has developed an S-factor calculation model (the model) in excel spreadsheet form that illustrates the calculation of the annual S-factors (in percentage terms) for DNSPs in accordance with the STPIS version 2.
The model is intended to be used as a tool to help DNSPs understand the calculations the AER uses to determine the S-factor. The model is not a data submission tool but DNSPs can use the model to replicate the AER’s S-factor calculations and test outcomes.
The handbook has been prepared to assist DNSPs identify the input data used in the model, follow the model’s calculation process and interpret the output from the model. It also details the limitations of the model.
The handbook and the model do not replace the AER’s STPIS for electricity distribution network service providers version 2.0 (the scheme) and if there are any differences between the model and the scheme, the scheme takes precedence. In particular, the model does not cover all the possible scenarios laid out in the scheme. The likelihood of some of these scenarios occurring is low, and attempting to cover all contingencies would increase the complexity—and decrease the accessibility—of the model.