The service target performance incentive scheme (STPIS) is a scheme established and amended by the AER which is designed to provide incentives for each transmission business to maintain or improve reliability of transmission network services at times most valued by customers and elements of the network most important to facilitating efficient wholesale electricity prices.
The Australian Energy Regulator (AER) published a final position paper today on the early application of version 4 of the STPIS for transmission businesses. The final position paper also sets out our preliminary position on the application of the STPIS to TransGrid and Transend during their transitional year. This preliminary position will assist in our preparation of the upcoming framework and approach paper for TransGrid and Transend. The framework and approach paper, as required under the transitional rules, will set out the modifications to be made to the application of the STPIS for the transitional regulatory control period for TransGrid and Transend.
On 20 December 2012, the AER finalised its review of the STPIS by publishing version 4 of the scheme. We amended the scheme to focus more on lead indicators of reliability in the service component, changed the way performance against the market impact component is measured to improve consistency of performance and introduced a new network capability component (NCC) to incentivise transmission businesses to identify and implement low cost solutions to network limitations.
On 29 May 2013, the AER received a formal application from ElectraNet seeking early application of the NCC of version 4 of the STPIS from 1 July 2014.
On 14 August 2013, the AER published a draft decision on the early application of version 4 of the STPIS. The draft decision set out our approach on the application of parts of version 4 of the STPIS to ElectraNet, Murraylink and Powerlink in their current regulatory control period and our proposed preliminary position on the application of the STPIS in the transitional year for TransGrid and Transend.
In light of issues raised in stakeholder submissions, we reviewed our position and now consider that the Electricity Rules do not provide us the power to apply an amended STPIS (or part thereof) to a transmission businesses in its current regulatory control period. Consequently, we cannot make a decision on the early application of version 4 of the STPIS.
The final position paper affirms our proposed preliminary position in the draft decision on the application of the STPIS to TransGrid and Transend during their transitional year.[/no-lexiocn]