Having considered submissions received through public consultation, our final determination regarding 2013 fire start outcomes confirms the position adopted within our draft determination published on 14 June 2014.
Under this determination, all Victorian DNSPs, except SP AusNet, will receive a penalty because there were more fire starts than the respective benchmark targets. The penalties range from $65 000 for CitiPower to $2 405 000 for Powercor. SP AusNet receives a $2 020 000 reward as its fire start number was below its benchmark target.
The f-factor is an incentive scheme. DNSPs can only retain their rewards for sustained and continuous improvements. Once improvements are made, the benchmark fire start targets will be tightened in future years.
| DNSP | Pass through amount ($) | Approximate charge ($) per customer p.a. |
|---|---|---|
| Citipower | (65 000) | (0.21) |
| Powercor | (2 405 000) | (3.27) |
| Jemena | (855 000) | (2.77) |
| SP AusNet | 2 020 000 | 3.11 |
| United Energy | (70 000) | (0.11) |
Note: Numbers in brackets represent negative numbers, indicating penalty for exceeding the relevant fire start target.
Background
On 24 June 2010, the Victorian Parliament passed the Energy and Resources Legislation Amendment Act 2010. The Act amended the National Electricity (Victoria) Act 2005 (the NEVA) to introduce an 'f-factor scheme'. Subsequently, the Victorian Government published the f-factor scheme order 2011 (the Order) on 23 June 2011 under the NEVA. The scheme provides incentives for Distribution Network Service Providers (DNSPs) to reduce the risk of fire starts due to electricity infrastructure, and to reduce the risk of loss or damage caused by fire starts. The Order prescribes that, for the first four years of the scheme (2012-15), DNSPs will be either rewarded or penalised at the pre-determined incentive rate of $25,000 per fire for performing better or worse than their respective targets.
On 22 December 2011, we made our f-factor scheme final determination. This set the fire start benchmark target for each Victorian DNSP. As required by the Order, the targets were based on the average of historical fire starts of each DNSP over the five previous calendar years-that is, the average of 2006-10.