The AER released a draft determination for comment on the proposed rewards/penalties for Victorian Distribution Businesses under the “f-factor scheme”. The f-factor scheme was established by the Victorian Government in June 2010. 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. For the first four years of the scheme (2012-15), the legislation prescribes that DNSPs will be either rewarded or penalised at the incentive rate of $25,000 per fire for performing better or worse than their respective targets and also requires the target to be set on the basis of a historical average – the average of fire starts during the five year period (2006-10) for each business.
Under the draft determination each of the DNSPs will receive a reward under the scheme as their actual number of fire starts for the 2012 year were below that of their respective fire start targets. This will mean a small increase in network tariffs of between $0.03 to $3.16 for the 2014 calendar year, depending on a customer’s distribution area. The table below provides further details of the average impact on customers' network charges for 2014. The f-factor is an incentive scheme. DNSPs can only receive a reward for sustained and continuous improvements. Once improvement is made, the benchmark fire-start targets will be tightened in future years.
| DNSP (distributor) | charge ($) per customer p.a. |
|---|---|
| CitiPower | $0.03 |
| Powercor | $3.50 |
| Jemena | $1.20 |
| SP AusNet | $3.16 |
| United Energy | $1.54 |
Invitation for submissions
Interested parties are invited to make written submissions on the draft f-factor amount determinations and explanatory statement by close of business, 2 August 2013.
Submissions should be sent electronically to: AERInquiry
aer [dot] gov [dot] au (AERInquiry[at]aer[dot]gov[dot]au).
Alternatively, submissions can be sent to:
Mr Chris Pattas
General Manager - Network Operations and Development
Australian Energy Regulator
GPO Box 520
MELBOURNE VIC 3001
The AER prefers that all submissions be sent in an electronic format in Microsoft Word or other text readable document form and publicly available, to facilitate an informed, transparent and robust consultation process. Accordingly, submissions will be treated as public documents and posted on the AER's website, unless prior arrangements are made with the AER to treat the submission, or portions of it, as confidential. Those wishing to submit confidential information are requested to:
- clearly identify the information that is the subject of the confidentiality claim; and
- provide a non-confidential version of the submission.
After submissions on this paper have been received and considered, the AER will issue the final f-factor amount determinations by 30 September 2013.