Customer Service Incentive Scheme (CSIS)
The AER is responsible for assessing the annual Customer Service Incentive Scheme (CSIS) performance of the electricity Distribution Network Service Providers (DNSPs).
The CSIS was introduced in July 2020 and is designed to encourage electricity distributors to improve their engagement with their customers. This is achieved by distributors undertaking consultation with their customers to identify services their customers want to improve, and then set targets and incentives to improve those services based on customers’ preferences. The distributors may be financially penalised or rewarded depending on how they perform against their customer service targets.
The CSIS has 4 principles that reflect the necessary components of an incentive scheme which cover:
- performance parameters – what customers want to be incentivised
- measurement methodology – how performance is measured
- assessment approach – how performance is rated, and
- financial component – how penalties/rewards are calculated and applied.
For the CSIS to be applied, incentive designs must meet the schemes' principles. Importantly, we will not apply an incentive design unless a DNSP can demonstrate that its customers support the incentive design through genuine engagement.
Application
The CSIS is applied at the discretion of the AER to a DNSP in its distribution determination. Since this is a new scheme, it only applied in Victoria for the 2023-24 regulatory year. Following CSIS approvals for other DNSPs such as TasNetworks and Essential Energy, its application will be broader for the 2024-25 regulatory year.
Details on the Victorian DNSPs’ individual CSIS applications are available at the relevant DNSP’s 2021-26 determination page:
- AusNet Services determination 2021–26
- CitiPower determination 2021–26
- Powercor determination 2021–26
- United Energy determination 2021–26
2023-24 Outcome
The AER has approved the following incentive payments or penalties:
- AusNet Services $-291,423 penalty
- CitiPower $1,715,181 reward
- Powercor $3,996,937 reward
- United Energy $2,155,928 reward