The AER has today published an application, received from Transgrid, for review of a system security network support (SSNS) contract.
Following the AEMC’s Improving Security Frameworks for the Energy Transition rule change, transmission network service providers (TNSPs) can now seek AER review of proposed SSNS payments, or payment methodologies, set out in a draft contract between the TNSP and SSNS provider (such as a generator or battery).
The AER’s role is to determine whether the expenditure for proposed SSNS payments, and methodologies for such payments, will likely be prudent and efficient. Transgrid’s application is the first SSNS payment contract review application received by the AER.
We will assess the application for consistency against the operating expenditure objectives and criteria in the National Electricity Rules, in accordance with our System security network support payment guideline.
Due to confidentiality requirements, some elements of the application are redacted to protect confidential and commercial-in-confidence information related to specific terms of the draft contract, and ongoing contract negotiations.
Noting that this is the first SSNS payment application the AER has received, we consider it important that stakeholders have an opportunity to provide feedback on the prudency and efficiency of the proposed payments and payment methodologies.
We are seeking stakeholder views in particular on the process Transgrid has followed to achieve the lowest possible cost outcome in the circumstances and the proposed contract payment structure.

Have your say
We invite interested parties to make submissions on Transgrid’s application by close of business 10 November 2025.
Submissions, or requests for alternative methods of feedback, should be sent to systemsecuritycontractreviewaer [dot] gov [dot] au (systemsecuritycontractreview[at]aer[dot]gov[dot]au).
Background
The Improving Security Frameworks for the Energy Transition rule change (the ISF Rule), published on 28 May 2024, changed the way TNSPs recover the costs of SSNS payments made for system security services.
System security services include system strength, inertia, and network support and control ancillary services typically provided by a synchronous generator or battery to ensure the power system is secure as it transitions to accommodate more renewable generation.
The ISF Rule introduced a revised method for forecasting and recovering TNSP expenditures for SSNS services through a new annual transmission pricing process, and revisions to the existing ex-post network support payment pass through process.
In addition, the ISF Rule allows (but does not require) TNSPs to seek a determination from the AER that an expenditure for a proposed SSNS payment, or a methodology for such a payment as set out in a draft contract between the TNSP and SSNS provider will likely be prudent and efficient.
To make this determination, we undertake an assessment of the application against the NER criteria. The NER criteria and our general approach to reviewing draft system security contracts is outlined in the AER’s System security network support payment guideline.