On 22 December 2016, the Victorian Government published the “f-factor scheme order 2016” (the 2016 Order), which revoked the previous 2011 f-factor scheme Order. Instead of the previous calendar year measurement method, the new f-factor scheme now measures fire starts on a financial year basis to coincide with the fire season.
The new f-factor scheme targets incentives towards fire ignitions that pose the greatest risk of harm via ignition risk units (IRUs). The key difference between the new and the current scheme is that each fire is weighted by a “location factor” and a “fire risk (timing) factor”. By applying these weighting factors to each fire, the fire will have a score called an “ignition risk unit” (IRU). These factors and their inputs are all prescribed by the Order.
Due to the move to reporting over financial year, there will be a 6-month transitional arrangement to close out the previous scheme. This Order has prescribed the transitional arrangement by:
- setting a 6-month target for the January –June 2016 period for each distributor based historical fire start information
- retaining the previous incentive rate of $25,000 per fire starts for the difference between the target and actual fire starts for this transitional period.
Under the new scheme, distributors will prepare a fire start report each year. Energy Safe Victoria (ESV) will then review this and verify the accuracy of the fire start reports. After this process, ESV will advise the AER on whether the reports are accurate; and if they are not accurate, the relevant IRU scores. We will then determine the appropriate rewards or penalties that may apply for each distributor in accordance with the incentive rate prescribed by the Order.
Details of the assessment method are shown in our final determinations on the Victorian f-factor scheme for the 2016–2020 regulatory period.
Distributors' F-factor outcomes of each reporting period are available from the Decision page.