The JEC made a submission to the Australian Energy Regulator’s (AER) proposed amendments to the STPIS scheme. The scheme incentivises transmission network service providers (TNSP) to both minimise the impacts of transmission outages to consumers and to incentivise TNSPs to make low cost, high-impact investments in their networks.
Thre aims of the scheme remain relevant and appropriate, but the scheme is not working as intended.
The JEC does not support the AER’s proposal to replace the Market Impact Component (MIC) with an expanded annual outage report. Using reputational risk to incentivise TNSPs is never effective, and is unlikely ever to be effective, given that TNSPs are monopoly providers of transmission services. Retaining a financial sanction-based regulatory model is appropriate.
The JEC supports the AER’s proposals regarding the other two components – the Network Capability Component (NCC) and the Service Component (SC).
We look forward to contributing to the work to develop and fine tune the amendments to all three components over the course of 2025.
