The F-factor scheme is a Victorian Government scheme that provides financial incentives to Victorian electricity distribution businesses to minimise the number of fire starts within their networks in high fire danger zones and times.
If the number of fire starts rises, the networks are required to pay a penalty, and if it falls, distributors may receive an incentive payment.
The AER has a limited role to give effect to the incentive payments/penalties by adjusting the distributors’ allowable revenue each year accordingly in accordance with the F-factor Order. All other aspects of the scheme are set out by the Victorian government including the targets and incentive rates.
The AER received fire start reports from the distributors for the 2022–23 reporting period. These reports have been validated by Energy Safe Victoria (ESV).
For the 2022–23 reporting period, incentive payments vary from a $9,798 reward for CitiPower with a 100 per cent urban network, to $1.77 million for Powercor with a large rural network. Overall Victorian electricity distribution businesses have received 28 per cent more in total incentive payments under the F-factor scheme in 2022–23 compared to the previous year.
Based on ESV’s validation of the reports, the AER has determined the incentive payments to the distributors for the 2022–23 period in accordance with clause 9(4) of the F-factor scheme Order 2016. These payments take the form of adjustments to the distributors’ regulated revenues for regulatory year 2025–26.
Table 1: F-factor incentive payments/penalties 2016–23 by distributor
| Reporting year | AusNet Services | CitiPower | Jemena | Powercor | United Energy | Total (Victorian electricity distributors) |
| 2016-17 | $1,485,000 | $43,200 | $117,300 | $4,639,200 | $224,400 | $6,509,100 |
| 2017-18 | $316,200 | $36,300 | $112,800 | $995,100 | $5,100 | $1,465,500 |
| 2018-19 | $404,100 | $31,500 | $116,400 | $3,745,200 | $62,400 | $4,359,600 |
| 2019-20 | $303,000 | -$6,600 | $49,500 | $1,548,600 | $105,900 | $2,000,400 |
| 2020-21 | $1,193,700 | $9,300 | $43,200 | $2,479,800 | $174,900 | $3,900,900 |
| 2021-22 | $279,600 | $12,000 | $49,800 | $1,187,700 | $182,400 | $1,711,500 |
| 2022-23 | $320,808 | $9,798 | $31,524 | $1,771,266 | $57,516 | $2,190,912 |
| Total | $4,302,408 | $135,498 | $520,524 | $16,366,866 | $812,616 | $22,137,912 |
The distributors' 2022-23 fire start reports and ESV's validation reports are provided below.