We are now publishing the annual Service Target Performance Incentive Scheme (STPIS) s-factor outcomes from the 2023–24 period.
We calculate s-factors using inputs DNSPs provide to us each year through the annual information orders, which we publish on our website.
Table 1: 2023–24 STPIS s-factor outcomes by distributor
DNSP | s-factor | |
|---|---|---|
% of allowable revenue | $2025–26 | |
| Ausgrid | 0.71% | $11,014,415 |
| AusNet Services | 1.82% | $14,614,137 |
| CitiPower | 0.84% | $2,896,957 |
| Endeavour Energy | 4.29% | $40,618,424 |
| Energex | 0.18% | $2,526,655 |
| Ergon Energy | 0.66% | $8,926,221 |
| Essential Energy | 2.26% | $25,623,768 |
| Evoenergy | -0.97% | -$1,572,450 |
| Jemena | 0.23% | $712,626 |
| Powercor | 4.38% | $35,034,323 |
| SA Power Networks | 1.37% | $12,272,081 |
| TasNetworks* | -2.16% | -$7,845,790 |
| United Energy | 2.90% | $13,398,427 |
| Total | $158,759,794 | |
*STPIS 1.2 applies to TasNetworks until the end of its current regulatory control period (2019–2024). All other DNSPs are subject to STPIS version 2.0.
BACKGROUND
Chapter 6 of the National Electricity Rules requires the AER to publish, administer, and maintain a STPIS which provides electricity distributors with incentives for maintaining and improving performance, to the extent that customers are willing to pay for such improvements. The STPIS is intended to ensure that distributors’ service levels do not reduce as result of efforts to achieve efficiency gains.
The s-factor (service standards factor) rewards (or penalises) DNSPs for improved (or diminished) service compared to predetermined targets for specific measures of service performance:
- reliability and quality of supply; and
- customer service (telephone answering).
The maximum annual allowable revenue a DNSP can recover as a reward or penalty under the STPIS is set at the time of each regulatory determination. This is called a revenue at risk cap.
In 2020, the AER introduced the Customer Service Incentive Scheme (CSIS). DNSPs can opt to apply the CSIS; if they do so and the AER approves, they are not required to apply the customer service parameter (telephone answering) of the STPIS. For DNSPs that have chosen to adopt the CSIS, their s-factors do not include performance against the telephone answering parameter of the STPIS.
The s-factor has a two-year time delay between the performance outcome and the adjustment of the annual allowable revenue. For example, s-factors calculated for the 2023–24 reporting year are incorporated into the 2025–26 tariffs set by the DNSPs.
ANNUAL COMPLIANCE REVIEW
Under STPIS cl. 7.1(a), a DNSP must report on its annual performance against the parameters applicable to it as set out in the relevant distribution determination in accordance with any applicable regulatory information instrument.
Publishing this information enhances transparency relating to the AER’s annual compliance reviews and coincides with a new streamlined approach.
The STPIS permits certain events to be excluded from the calculation of the incentive rewards or penalties. These exclusions are intended to reflect circumstances where a DNSP is unable to control an interruption, or an event occurs on a major event day. A DNSP must provide details annually of these exclusions.
We examine a representative sample of DNSPs' exclusions in detail to inform our assessment of the data provided. We do additional quality checks on the data and have an introduced a standardised s-factor model, which will be used for the first time in the review of 2024–25 performance.
Our annual compliance review process will help improve efficiencies for DNSPs and the AER without compromising data quality or robust analysis.