Regulators have launched a review of electricity transmission service standards incentive schemes. 

The Australian Energy Regulator (AER) has released an issues paper as part of its review of aspects of the service target performance incentive scheme (STPIS) for transmission network service providers (TNSPs).

The STPIS provides financial rewards when TNSPs improve service standards, and financial penalties when service standards deteriorate. The scheme provides incentives to:

  • reduce the number and duration of outages (the service component of the STPIS)

  • take planned outages when they have the least impact on wholesale market prices (the market impact component)

  • undertake low cost projects which improve the capability of existing networks (the network capability component). 

The transition to renewable energy sources is changing the way transmission networks operate and invest. The AER says it needs to assess what aspects of the STPIS remain fit for purpose in light of these changes.

This Issues Paper discusses components of the AER’s STPIS work, their effectiveness, and outlines possible options to address identified shortcomings. 

The AER is seeking submissions by 5 April 2024 and invites interested stakeholders to attend a public forum in March 2024.