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Title: Performance-based ratemaking for electric utilities: Review of plans and analysis of economic and resource-planning issues. Volume 1

Abstract

Performance-Based Ratemaking (PBR) is a form of utility regulation that strengthens the financial incentives to lower rates, lower costs, or improve nonprice performance relative traditional regulation, which the authors call cost-of-service, rate-of-return (COS/ROR) regulation. Although the electric utility industry has considerable experience with incentive mechanisms that target specific areas of performance, implementation of mechanisms that cover a comprehensive set of utility costs or services is relatively rare. In recent years, interest in PBR has increased as a result of growing dissatisfaction with COS/ROR and as a result of economic and technological trends that are leading to more competition in certain segments of the electricity industry. In addition, incentive regulation has been used with some success in other public utility industries, most notably telecommunications in the US and telecommunications, energy, and water in the United Kingdom. In this report, the authors analyze comprehensive PBR mechanisms for electric utilities in four ways: (1) they describe different types of PBR mechanisms, (2) they review a sample of actual PBR plans, (3) they consider the interaction of PBR and utility-funded energy efficiency programs, and (4) they examine how PBR interacts with electric utility resource planning and industry restructuring. The report should be of interestmore » to technical staff of utilities and regulatory commissions that are actively considering or designing PBR mechanisms. 16 figs., 17 tabs.« less

Authors:
; ;  [1];  [1]
  1. Lawrence Berkeley Lab., CA (United States). Energy and Environment Div.
Publication Date:
Research Org.:
Lawrence Berkeley National Lab. (LBNL), Berkeley, CA (United States)
Sponsoring Org.:
USDOE, Washington, DC (United States)
OSTI Identifier:
179242
Report Number(s):
LBL-37577-Vol.1
ON: DE96004685; TRN: AHC29603%%67
DOE Contract Number:  
AC03-76SF00098
Resource Type:
Technical Report
Resource Relation:
Other Information: PBD: Nov 1995
Country of Publication:
United States
Language:
English
Subject:
24 POWER TRANSMISSION AND DISTRIBUTION; 29 ENERGY PLANNING AND POLICY; ELECTRIC UTILITIES; RATE STRUCTURE; PRICING REGULATIONS; RESOURCE CONSERVATION; LOAD MANAGEMENT

Citation Formats

Comnes, G A, Stoft, S, Greene, N, Hill, L J, and Oak Ridge National Lab., TN. Performance-based ratemaking for electric utilities: Review of plans and analysis of economic and resource-planning issues. Volume 1. United States: N. p., 1995. Web. doi:10.2172/179242.
Comnes, G A, Stoft, S, Greene, N, Hill, L J, & Oak Ridge National Lab., TN. Performance-based ratemaking for electric utilities: Review of plans and analysis of economic and resource-planning issues. Volume 1. United States. https://doi.org/10.2172/179242
Comnes, G A, Stoft, S, Greene, N, Hill, L J, and Oak Ridge National Lab., TN. 1995. "Performance-based ratemaking for electric utilities: Review of plans and analysis of economic and resource-planning issues. Volume 1". United States. https://doi.org/10.2172/179242. https://www.osti.gov/servlets/purl/179242.
@article{osti_179242,
title = {Performance-based ratemaking for electric utilities: Review of plans and analysis of economic and resource-planning issues. Volume 1},
author = {Comnes, G A and Stoft, S and Greene, N and Hill, L J and Oak Ridge National Lab., TN},
abstractNote = {Performance-Based Ratemaking (PBR) is a form of utility regulation that strengthens the financial incentives to lower rates, lower costs, or improve nonprice performance relative traditional regulation, which the authors call cost-of-service, rate-of-return (COS/ROR) regulation. Although the electric utility industry has considerable experience with incentive mechanisms that target specific areas of performance, implementation of mechanisms that cover a comprehensive set of utility costs or services is relatively rare. In recent years, interest in PBR has increased as a result of growing dissatisfaction with COS/ROR and as a result of economic and technological trends that are leading to more competition in certain segments of the electricity industry. In addition, incentive regulation has been used with some success in other public utility industries, most notably telecommunications in the US and telecommunications, energy, and water in the United Kingdom. In this report, the authors analyze comprehensive PBR mechanisms for electric utilities in four ways: (1) they describe different types of PBR mechanisms, (2) they review a sample of actual PBR plans, (3) they consider the interaction of PBR and utility-funded energy efficiency programs, and (4) they examine how PBR interacts with electric utility resource planning and industry restructuring. The report should be of interest to technical staff of utilities and regulatory commissions that are actively considering or designing PBR mechanisms. 16 figs., 17 tabs.},
doi = {10.2172/179242},
url = {https://www.osti.gov/biblio/179242}, journal = {},
number = ,
volume = ,
place = {United States},
year = {Wed Nov 01 00:00:00 EST 1995},
month = {Wed Nov 01 00:00:00 EST 1995}
}