provide greater reliability of the transmission system that is owned, controlled or operated by it at all times when network users place greatest value on the reliability of the transmission system; and improve and maintain the reliability of those elements of the transmission system that are most important to determining spot prices. For these reasons, we consider that version 4.1 of the STPIS should apply to AusNet Services in the next regulatory period. This will benefit both transmission network users and consumers of electricity, in line with the NEO. Reasons for applying the STPIS in the next period In this section we discuss each component of version 4.1 of the STPIS, and how each component will apply to AusNet Services in the next regulatory control period. Service component The service component of the STPIS incentivises TNSPs to maintain and improve network availability and reliability by measuring performance against certain parameters. Under this component of the scheme, a TNSP can receive a revenue increment or decrement of up to one per cent of its MAR for the regulatory year. A TNSP receives a financial incentive (reward) in proportion to the extent its annual performance exceeds its performance target (calculated as the s-factor). If the TNSP fails to meet its performance target, it incurs a financial penalty in proportion to the extent its annual performance does not meet the performance target. Version 4 of the STPIS amended the service component parameters to focus more on unplanned outages, including a new parameter focusing on proper operation of equipment. Performance against these parameters can be used as a lead indicator of a deterioration of network reliability. The scheme contains definitions for each parameter. The definitions specify the applicable sub-parameters, unit of measure, source of performance data, the formula for measuring performance, definitions of relevant terms, inclusions (which specify particular equipment or events which are to be measured) and exclusions. For the next regulatory control period we will assess whether AusNet proposed Services’ performance targets, caps, collars and weightings comply with the version 4.1 STPIS requirements for: average circuit outage rate, with six sub-parameters: line outage fault – transformer outage fault – reactive plant fault – line outage forced outage – transformer outage forced outage –
provide greater reliability of the transmission system that is owned, controlled or operated by it at all times when network users place greatest value on the reliability of the transmission system; and improve and maintain the reliability of those elements of the transmission system that are most important to determining spot prices. For these reasons, we consider that version 4.1 of the STPIS should apply to AusNet Services in the next regulatory period. This will benefit both transmission network users and consumers of electricity, in line with the NEO. Reasons for applying the STPIS in the next period In this section we discuss each component of version 4.1 of the STPIS, and how each component will apply to AusNet Services in the next regulatory control period. Service component The service component of the STPIS incentivises TNSPs to maintain and improve network availability and reliability by measuring performance against certain parameters. Under this component of the scheme, a TNSP can receive a revenue increment or decrement of up to one per cent of its MAR for the regulatory year. A TNSP receives a financial incentive (reward) in proportion to the extent its annual performance exceeds its performance target (calculated as the s-factor). If the TNSP fails to meet its performance target, it incurs a financial penalty in proportion to the extent its annual performance does not meet the performance target. Version 4 of the STPIS amended the service component parameters to focus more on unplanned outages, including a new parameter focusing on proper operation of equipment. Performance against these parameters can be used as a lead indicator of a deterioration of network reliability. The scheme contains definitions for each parameter. The definitions specify the applicable sub-parameters, unit of measure, source of performance data, the formula for measuring performance, definitions of relevant terms, inclusions (which specify particular equipment or events which are to be measured) and exclusions. For the next regulatory control period we will assess whether AusNet Services’ proposed performance targets, caps, collars and weightings comply with the version 4.1 STPIS requirements for: average circuit outage rate, with six sub-parameters: line outage – fault transformer outage – fault reactive plant – fault line outage – forced outage transformer outage – forced outage