Performance-Based Utility Regulations

Legislators use performance-based utility regulations to ensure that utilities better align with people's interests. Especially with climate change, it is increasingly vital that power grids resist changing weather patterns. Performance-based regulations look at utility companies' actual performance and effects and offer financial incentives/disincentives to encourage certain goals and metrics. One metric that could be valuable is efficiency, which current utility regulations frameworks often do not consider. The following article will uncover how performance-based regulations work and differ from the traditional cost-of-service model.