On 14 May 2026, the Australian Energy Market Commission (AEMC or Commission) made a final rule to enable the early application of a revised transmission service target performance incentive scheme (STPIS) in the immediate- and long-term. The final rule is in response to a rule change request by the Australian Energy Regulator (AER) that sought to amend the National Electricity Rules (NER or rules) to allow it to reopen a transmission network service provider’s (TNSP) revenue determination for the purpose of applying a revised STPIS during a regulatory control period.

The final rule will commence on 21 May 2026.

We have made a more preferable final rule to apply STPIS Version 6 components early

Our more preferable final rule will align certain STPIS components with Version 6 of the scheme. This involves:

• disapplying the market impact component for relevant TNSPs for performance from 1 January 2026
• amending the target for the loss of supply event frequency parameter under the service component for relevant TNSPs for performance from 1 January 2027
• not making any changes in relation to the network capability component under STPIS Version 6 – this component will continue to be aligned with STPIS Version 5 until the commencement of a TNSP’s next regulatory control period.

We have made a more preferable final rule enabling the AER to apply a revised STPIS early

Our more preferable final rule introduces the ability for the AER to implement a revised STPIS before a new regulatory control period commences, only after public consultation on the proposed early application arrangements. The final rule separates the consultation on amendments to the STPIS from consultation on its early application. Following the latter, the AER can revoke and substitute a TNSP’s revenue determination to give effect to the determined early application arrangements.

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. 

The Commission published the draft determination on 19 February 2026, which made a more preferable draft rule to enable the early application of STPIS Version 6 components and enable the AER to consult and determine early application arrangements to apply a revised STPIS early as part of the AER’s review of the STPIS. Submissions closed on 2 April 2026.