The AEMC has made a draft rule which seeks to enable a process for regulated transmission businesses to bring forward lower-cost projects which reduce transmission network congestion and optimise the capacity of the network to transport power more efficiently. Eligible projects may include transmission line uprating and improving capacity limits.

The draft rule (Early Application of Service Target Performance Incentive Scheme (STPIS) Components to Transmission Businesses) is consistent with the rule proponent’s (ElectraNet) proposed rule, with some minor amendments to provide greater clarity regarding its application.

The STPIS is an incentive scheme developed by the Australian Energy Regulator (AER) to encourage the regulated electricity transmission businesses to maintain or improve the performance of their networks. It consists of three components: service (focussed on dependability of supply); market impact (focussed on controlled management of outages); and network capability (including incentive payments for projects which reduce network congestion and improve the capability of the transmission network at times of greatest benefit).

This rule request relates only to the network capability component in STPIS version 4 which would apply to those transmission businesses undertaking eligible projects prior to their next regulatory control period.

The draft rule seeks to encourage improvements to the volume of generated electricity that can be dispatched across the transmission network without constraint due to capacity limitations. This may lead to more efficient pricing in the wholesale electricity market and, in turn, more efficient pricing for consumers.

Stakeholders are invited to make written submissions in response to this draft rule determination, including the draft rule, by no later than 8 January 2015.