On 19 February 2026, the Australian Energy Market (AEMC or Commission) published its draft determination and more preferable draft rule to enable the timely application of a transmission service target performance incentive scheme (STPIS) in the immediate- and long-term. The draft rule is in response to a rule change request from the Australian Energy Regulator (AER).

The draft rule would align certain STPIS components with Version 6 of the scheme

In the immediate-term, the draft rule would apply components of STPIS Version 6 sooner to:

• disapply the market impact component (MIC) for a transmission network service provider’s (TNSP) performance from 1 January 2026.
• amend the target for the loss of supply frequency parameter under the service component (SC) for TNSP performance from 1 July 2026.

The draft rule would require the AER to consult on the potential early application of a future STPIS

In the long-term and regarding any future changes to the STPIS, the draft rule requires that the AER consult on the potential early application of a new scheme during the relevant review. It allows the AER to determine in its final decision whether the new scheme should be applied early, including stipulating any necessary early application arrangements to allow the new scheme, or components of the new scheme, to be applied to TNSPs early.

Background

On 28 August 2025, the AEMC received a rule change request from the AER. It seeks to amend the National Electricity Rules to allow it to reopen a TNSP’s revenue determination for the purpose of applying a revised STPIS during a regulatory control period. This could be on the AER’s initiative or on application by the TNSP.

The AER identified two issues it is seeking to address through this rule change – one in the immediate-term and one in the long-term:

• Immediate-term: The AER recently published version 6 of the transmission STPIS. Under the current rules, the AER can only apply a revised STPIS to a TNSP at the time of making a revenue determination. This means that Version 6 of the STPIS cannot be applied until the start of a TNSP’s next regulatory control period.
• Long-term: The AER lacks an enduring power to apply a revised STPIS in a timely way that responds to the changing circumstances of the energy system. The AER explains that changes to the STPIS are likely to be required more often as the energy system transitions. The enduring power would enable the timely implementation of more effective incentive mechanisms that better reflect the energy transition.

On 13 November 2025, the AEMC published a consultation paper in response to this rule change request. Submissions closed on 11 December 2025.