A brief history and status report on performance-based ratemaking

Conference · Wed Nov 01 04:00:00 EST 1995

OSTI ID:121497

Walker, M R ^[1]

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1. AUC Management Consultants, Vancouver, WA (United States)

In recent years, `performance-based` regulation has been one of a number of terms used interchangeably to describe the transformation from Rate of Return (ROR) regulation to a broader concept of price control and incentives. However, it is believed that PBR is distinct from the generic `alternative regulation` and broader than just `incentive regulation`, since all forms of regulation encompass some type of incentive. In the electric utility industry, certain `sliding-scale` incentive plans have been employed for over 50 years, usually in municipal franchises. In fact, regulation has been undergoing incremental change and experimentation with alternative for a number of years. In an environment where competition is truly beginning to occur, combined with a growing concern over the efficiency and cost of the regulatory process, many companies, regulators, and legislators are engaged in a consolidation of these piecemeal and narrowly focused programs into broader, multifaceted, mechanisms which we refer to as `performance-based ratemaking` (PBR). The basic defining characteristics of PBR that is used to distinguish this form of regulation from ROR regulation are embedded in the goals of these programs.

• OSTI ID: 121497
• Report Number(s): CONF-9509109--
• Country of Publication: United States
• Language: English

Related Subjects

24 POWER TRANSMISSION AND DISTRIBUTION
29 ENERGY PLANNING, POLICY, AND ECONOMY
COMPETITION
COST RECOVERY
ELECTRIC POWER
ELECTRIC POWER INDUSTRY
MANAGEMENT
PERFORMANCE
RATE STRUCTURE
REGULATIONS