New Transmission Productivity and Benchmarking Study

Pacific Economics Group filed its latest power transmission cost and productivity study on Friday, 19 February. The study updates PEG’s estimates of productivity trends in the U.S. power transmission industry and details new econometric benchmarking models of operation and maintenance, capital, and multifactor cost efficiency. PEG reports that the deterioration in the productivity of the industry has continued since its prior study, which was filed in a 2019 Ontario Energy Board proceeding. The multifactor transmission productivity growth of 51 utilities in the study averaged a 0.62% annual decline over the full 1996-2019 sample period but a 2.26% annual decline in the last fifteen years. The study was authorized by Québec’s Régie de l’énergie in proceeding R-4058-2018 Phase 2. The Régie de l’énergie and the Ontario Energy Board have both established performance-based approaches to the regulation of power transmission which escalate allowed revenue growth using mathematical formulas. Hydro-Québec is North America’s largest transmission service provider.