The Australian Energy Market Commission has made a final rule which provides a process for regulated electricity transmission businesses to bring forward lower-cost projects which reduce transmission network congestion and optimise the efficient supply of electricity.  

The final rule - Early Application of Service Target Performance Incentive Scheme (STPIS) Components to Transmission Businesses - is consistent with the draft rule and the original proposed rule with minor amendments, reflecting stakeholders’ submissions and the Commission’s analysis, to clarify its application and provide greater certainty to transmission businesses and the Australian Energy Regulator.

The STPIS is an incentive scheme developed by the Australian Energy Regulator 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 final rule relates only to the network capability component in STPIS version 4.1, and affects those transmission businesses that seek to apply to the Australian Energy Regulator for approval to undertake eligible projects prior to their next regulatory control period. Such projects may include transmission line uprating and improving capacity limits.

The final 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.

The provisions in the final rule commence on 19 February 2015.

For information contact:

AEMC Senior Director, Slavko Jovanoski (02) 8296 7800

Media: Communications Manager, Prudence Anderson 0404 821 935 or (02) 8296 7817