On 13 November 2025, the Australian Energy Market Commission (AEMC) published a consultation paper on a rule change request from the Australian Energy Regulator (AER). The AER is seeking an amendment to the National Electricity Rules (NER or rules) that would allow it to reopen a transmission network service provider’s (TNSP) revenue determination for the purpose of applying a revised service target performance incentive scheme (STPIS) during a regulatory control period.

The transmission STPIS provides incentives to TNSPs to improve or maintain a high level of service for the benefit of participants in the NEM and end users of electricity. 
The scheme currently consists of three components that provide incentives to TNSPs to:

• schedule planned outages at times which minimise impact on spot market outcomes (market impact component)
• increase capability of existing assets (network capability component)
• maintain the reliability of its network (service component)

Submissions are due on 11 December 2025.

We are seeking your views on whether the current NER arrangements create issues in the immediate- and long-term

The AER have 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.

We are seeking your views on the AER’s proposed solution

The AER is seeking an enduring power under the NER that would allow it to reopen a TNSP’s revenue determination during a regulatory control period for the purpose of applying a revised STPIS, either upon application from a TNSP or on the AER’s own initiative.

The AEMC is seeking your feedback on the proposed solution and whether it would address the issues raised by the AER. The AEMC is also seeking stakeholder views on whether there are alternative solutions to consider.

Next steps

Written submissions to the consultation paper must be lodged with the Commission by 11 December 2025 via the Commission’s website, https://www.aemc.gov.au/contact-us/lodge-submission. Please use the project code ERC0421 when lodging a submission.