Overview

Accepting submissions
Type
Sector
Electricity
Segment
Transmission
Region
New South Wales
Queensland
South Australia
Tasmania
Victoria
Interconnector
Status
Open
Date initiated

In April 2023, the AER completed a review of all of the incentive schemes that it applies to network service providers. The review found that the service component of the service target performance incentive scheme STPIS remains fit for purpose, but that the market impact and network capability components are not working as intended. 

The AER committed to commencing a review of market impact and network capability components of the STPIS at the end of 2023. 

On 8 December 2023, the AER released an issues paper which is the first step in our review of aspects of the STPIS for transmission network service providers (TNSPs).

This Issues Paper discusses components of the AER’s STPIS work, their effectiveness, and outlines possible options to address identified shortcomings. 

We are seeking submissions on our Issues Paper by Friday, 5 April 2024.

Public forum

On Monday, 18 March 2024 the AER will host a public online forum to discuss its review of the service target performance incentive scheme for TNSPs. We invite interested stakeholders to register their attendance. 

The AER will finalise the review by the end of 2024. 

Background

The STPIS provides financial rewards when TNSPs improve service standards, and financial penalties when service standards deteriorate. The scheme provides incentives to TNSPs:

  • reduce the number and duration of outages (the service component of the STPIS)
  • take planned outages when they have the least impact on wholesale market prices (the market impact component)
  • undertake low cost projects which improve the capability of existing networks (the network capability component). 

 The transition to renewable energy sources is changing the way transmission networks operate and invest. The AER is assessing what aspects of the STPIS remain fit for purpose in light of these changes.