Statistical Benchmarking for Power Distributors

PEG recently released its latest statistical benchmarking models for power distributors. Five models, estimated econometrically using recent historical data on the operations of U.S. electric utilities, address operation and maintenance expenses, capital cost, capital expenditures, total cost, and two important reliability metrics (SAIDI and SAIFI). Results can be accessed here. The research was undertaken for the Ontario Energy Board ("OEB") in a proceeding to consider a performance-based ratemaking ("PBR") proposal by Toronto Hydro-Electric. PBR in Ontario features multiyear rate plans with terms that are linked to the outcomes of statistical benchmarking studies. A demonstrably superior cost performer can enjoy more rapid rate growth.

The OEB also uses an econometric model, estimated with Ontario data, to benchmark the total cost of all provincial power distributors. Results are updated annually and posted on public scorecards that also report results for various other performance metrics. PEG developed this model and will soon release results for the 2018 operating year.