Table 2: Performance Based Rate (PBR) State Chart AEE (illustrative but not complete list) – Policies Program Area Principle(s) guiding performance Incentive(s) general – – – types of characterization performance foci UK Office of Broad- gas Put stakeholders at the heart of their Each index has a range of incentive Gas and transmission, decision-making process options (e.g. min/max) Electricity electricity Invest efficiently to ensure continued Markets - RIIO transmission, gas safe and reliable services distribution and Innovate to reduce network costs for electricity current and future consumers distribution Play a full role in delivering a low carbon economy and wider environmental objectives. Massachusetts Energy Efficiency (1) be designed to encourage Program Design-level performance is defined Department of Performance Administrators to pursue all available as 100 percent of a Program Public Utilities Incentive(s) cost-effective energy efficiency; (2) be projected benefits Administrator’s designed to encourage energy and net benefits (Statewide Plan, efficiency programs that will best Exh. 1, at 241-242). Exemplary achieve the energy performance is defined as 125 Commonwealth’s goals; (3) be based on clearly defined percent of design-level performance, goals and activities that can be while threshold performance sufficiently monitored, quantified, and requires the achievement of 75 verified after the fact; (4) be available percent of design-level performance, only for activities in which the Program by component (Statewide Plan, Exh. Administrator plays a distinct and clear 1, at 241). role in bringing about the desired outcome; (5) be as consistent as possible across all electric and gas Program Administrators; and (6) avoid any perverse incentives. New York Broad regulatory 1) reform the utility business model and Public Service reform, emphasis 2) align ratemaking practices with an Commission on distribution-level evolving set of regulatory and policy Reforming the networks to be objectives Energy Vision utilized as – Track 2 platforms Ontario Energy Broad regulatory Outcomes targeted for distribution Board: reforms related to companies include customer focus, Renewed rate setting, operational effectiveness, public policy Regulatory planning, and responsiveness, and financial Framework for measuring performance Electricity performance Distributors New York – “Reforming the Energy Vision” (REV) Following Hurricane Sandy in October of 2012, a consensus evolved in New York to address aging
Table 2: Performance Based Rate (PBR) State Chart – AEE (illustrative but not complete list) Policies Program Area – types of performance foci Principle(s) – guiding performance Incentive(s) – general characterization UK Office of Gas and Electricity Markets - RIIO Broad- gas transmission, electricity transmission, gas distribution and electricity distribution Put stakeholders at the heart of their decision-making process Invest efficiently to ensure continued safe and reliable services Innovate to reduce network costs for current and future consumers Play a full role in delivering a low carbon economy and wider environmental objectives. Each index has a range of incentive options (e.g. min/max) Massachusetts Department of Public Utilities Energy Efficiency Performance Incentive(s) (1) be designed to encourage Program Administrators to pursue all available cost-effective energy efficiency; (2) be designed to encourage energy efficiency programs that will best achieve the Commonwealth’s energy goals; (3) be based on clearly defined goals and activities that can be sufficiently monitored, quantified, and verified after the fact; (4) be available only for activities in which the Program Administrator plays a distinct and clear role in bringing about the desired outcome; (5) be as consistent as possible across all electric and gas Program Administrators; and (6) avoid any perverse incentives. Design-level performance is defined as 100 percent of a Program Administrator’s projected benefits and net benefits (Statewide Plan, Exh. 1, at 241-242). Exemplary performance is defined as 125 percent of design-level performance, while threshold performance requires the achievement of 75 percent of design-level performance, by component (Statewide Plan, Exh. 1, at 241). New York Public Service Commission Reforming the Energy Vision – Track 2 Broad regulatory reform, emphasis on distribution-level networks to be utilized as platforms 1) reform the utility business model and 2) align ratemaking practices with an evolving set of regulatory and policy objectives Ontario Energy Board: Renewed Regulatory Framework for Electricity Distributors Broad regulatory reforms related to rate setting, planning, and measuring performance Outcomes targeted for distribution companies include customer focus, operational effectiveness, public policy responsiveness, and financial performance New York – “Reforming the Energy Vision” (REV) Following Hurricane Sandy in October of 2012, a consensus evolved in New York to address aging
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