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Utility Dive: Upheaval in utility regulation emerging nationally as Hawaii proves a performance-based approach

Posted by Herman K. Trabish on Jul 12, 2022

Utility Dive compared reforms for utility performance, quoting AEE's Ryan Katofsky on how Hawaii's low-cost reforms are improving service. Read snippets below and the full article here.

Many states are working on regulatory reforms focused on utility performance, but some compromise approaches may be self-defeating, performance-based regulation, or PBR, consultants said.

]New PBR incentives would align utility rewards with achieving public policy goals, advocates contend. But entrenched commitments by power system incumbents to traditional cost of service, or COS, regulation that rewards utilities with guaranteed profits for capital infrastructure investments is forcing compromised reforms in places like Illinois and North Carolina that worry regulatory analysts.

COS rewards utilities for capital investments and gives them no incentive to take advantage of other opportunities, said Advanced Energy Economy Managing Director Ryan Katofsky. But “Hawaii’s success shows PBR can recognize the value of new low-cost technologies to improve utility service or meet societal goals.”

Read the full article here.

Topics: Utility, Regulatory, AEE In The News, Ryan Katofsky