Parties Seek Continuation of Alberta PBR

The Alberta Utilities Commission has for many years been a leading North American practitioner of performance-based ratemaking (“PBR”). Gas and electric power distributors are in the fourth year of their second successive multiyear rate plan. Rates (or in the case of gas utilities, revenue) are indexed for inflation and industry productivity trends. Interested parties filed comments on April 22 that appraised past experience with Alberta PBR and expressed their views about its continuation. Utilities and major consumer groups alike reported generally positive experience with PBR and recommended its continuation. Regulation was streamlined and some utilities materially improved cost performance. Service quality was maintained. Some problems in the design of the first-generation plans were rectified in the second-generation plans. Consumer groups seek more assurance that customers will receive a fair share of plan benefits. Pacific Economics Group played a prominent role in the PBR proceedings that approved both plans.