The Australian Energy Regulator (AER) has published its final Export Service Incentive Scheme, which is designed to encourage electricity distributors to actively engage with their customers to inform the quality of export services they provide.
The Scheme is principles based and allows electricity distributors to propose bespoke incentive arrangements in accordance with their customers’ preferences. It also allows the AER to set targets for export service performance and requires electricity distributors to report on performance against those targets. Electricity distributors may be financially rewarded or penalised depending on how they perform against their export service targets.
The scheme was developed following the Australian Energy Market Commission’s (AEMC) access, pricing and incentive arrangements for distributed energy resources final determination. The AEMC found that if incentive frameworks are left unchanged, electricity distributors could be incentivised to reduce costs at the expense of export service quality. The AER undertook a review of incentive arrangements for export services and concluded that it should develop a new small-scale incentive scheme to allow electricity distributors to propose bespoke incentives.
The AER may first apply the scheme to the 2024-29 revenue determinations for the NSW, ACT, Tasmania and Northern Territory electricity distributors. These determinations come into effect in July 2024.