Customer Service Incentive Scheme
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 scheme’s 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. This year, New South Wales DNSPs Ausgrid, Essential Energy, Endeavour Energy, and Tasmanian DNSP TasNetworks are subject to annual compliance for the first time.
On 11 April 2025, the AER published its decision to suspend AusNet’s CSIS for the 2024–2025 and 2025–2026 regulatory years and accordingly AusNet will receive no incentive reward/penalty for this regulatory year.
The AER published the decision to suspend the ‘time to resolve customer complaints’ parameter on 24 November 2025. This suspension is limited to the 2024–2025 regulatory year, with the corrected parameter to apply from the 2025–2026 regulatory year.
Details on individual CSIS applications are available at the relevant DNSP’s determination page:
- Ausgrid determination 2024–29
- AusNet Services determination 2021–26
- CitiPower determination 2021–26
- Endeavour Energy determination 2024–29
- Essential Energy determination 2024–29
- Powercor determination 2021–26
- TasNetworks determination 2024–29
- United Energy determination 2021–26
2024-25 Outcomes
The AER has approved the following incentive outcomes:
- Ausgrid: penalty of $-2,777,801
- CitiPower: reward of $1,793,609
- Endeavour Energy: reward of $5,315,897
- Essential Energy: reward of $974,928
- Powercor: reward of $4,235,901
- TasNetworks: penalty of $-31,431
- United Energy: reward of $2,495,317