New f-factor scheme to help prevent bushfires
Thursday, 24 June 2011
The Victorian Government has introduced an incentive scheme that will increase the safety of electricity assets and help prevent bushfires.
The Minister for Energy Michael O'Brien today announced the introduction of the f-factor scheme which further encourages electricity distribution businesses to reduce fires started by their assets.
The scheme provides distribution businesses with an additional incentive to improve the management of electricity distribution assets to prevent fires from starting as a result of those assets. This is over and above previous commitments to implement all the recommendations of the Bushfire Royal Commission.
The introduction of the f-factor scheme will complement the Victorian Government's $50 million Safer Electrical Assets fund to commence the process of upgrading distribution assets in the areas of high bushfire risk.
The f-factor scheme, which will be administered by the Australian Energy Regulator (AER), will operate by linking annual changes in the regulated revenues of the distribution businesses to the number of fires started by their electricity assets each year.
The scheme has commenced via an Order in Council. The AER is required to set the first fire start benchmark or target by 31 December 2011, meaning the incentives will be in place from 1 Jan 2012. Distribution businesses will lose revenue if their performance is lower than the benchmark.
The Powerline Bushfire Safety Taskforce is considering the most cost-effective methods to reduce the risk of bushfires posed by electricity assets, including replacement of single wire earth return (SWER) and 22 kV lines, and is due to report by the end of September.
