NARUC: Performance-Based Ratemaking – 2026
CONTENT SCOPE
- Alternatives to the traditional cost of service (COS) approach to rate making. Typical components of a PBR plan
- Effectiveness and regulatory efficiency of COS and how they can be improved. The spectrum of regulation between COS and PBR.
- Brief overview of Cost of Service and Performance Based Regulation key parameters
- Incremental Capital Mechanism (ICM) & Efficiency Carryover Mechanism (ECM)
- Incentive mechanisms related to Regulatory Return on Equity, such as Earnings Sharing Mechanism
- Determining the productivity offset
- When PBR gets reopened, offramps are triggered – what are the implications and complications, and is there a limit to over-earning?
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