We have completed our review of the electricity transmission service target performance incentive scheme (STPIS), culminating in a new version 6 of the scheme. Our accompanying Explanatory Statement explains how the revised scheme will apply.
The STPIS is an important regulatory mechanism that incentivises transmission network service providers (TNSPs) to:
- reduce the number and duration of outages (the service component, SC),
- schedule outages for when they have the least impact on wholesale market prices (the market impact component, MIC), and
- undertake low-cost projects which improve the capability of the existing network (the network capability component, NCC).
We have now completed our comprehensive review of all components of the STPIS.
Throughout our review, networks and other stakeholders raised concerns that in its current form elements of the STPIS are no longer working as intended. This is due to the current transition to renewable energy sources, which is changing the way electricity is generated and transported.
In arriving at our final decision, we considered that while the STPIS remains an important regulatory tool, stakeholders’ concerns are credible and changes to the STPIS are required to accommodate these developments. These amendments to the scheme will continue to ensure TNSPs are operating their networks in the best interests of market participants and consumers.
Our final positions are to:
- amend the loss of supply event frequency parameter of the SC
- suspend the MIC, and we will explore developing an effective alternative by establishing a working group with AEMO and key stakeholders, and
- amend the NCC to make it a more streamlined process.