performance incentives

Unintended Consequences Create Challenges for Utility Regulators

Making sure that regulatory incentives do what the regulators intended.

In a new post, Dan Farber mentions performance-based regulation as a promising tool for encouraging energy utilities to be enthusiastic in supporting the transition to clean energy sources. There are a lot of people who agree with him. After all, traditional utility regulation tends to encourage the companies to overspend on infrastructure and under spend …