Reforming Utility Incentives

This chapter examines the traditional cost of service model used by utilities, highlighting its past benefits and current drawbacks, including incentives for inefficiency and excessive consumption. It discusses the shift towards performance-based regulation (PBR) as a potential solution, focusing on concepts like decoupling that aim to better align utility profits with energy efficiency and societal needs. The chapter underscores the critical need for reform in regulatory frameworks to facilitate a successful energy transition and improve service delivery.