PEG Wins Two Major PBR Projects

PEG won two competitive bids in February to help the Ontario Energy Board improve its approach to performance-based ratemaking. The OEB has for more than two decades been a leading North American PBR practitioner.  The Board is especially well known for its reliance on sophisticated statistical cost research in ratemaking. PEG has been retained to update the power distributor cost benchmarking and productivity studies that the Board uses to design attrition relief mechanisms for its multiyear rate plans. The Board is also concerned about the extent to which MRPs encourage idiosyncratic spending patterns that reduce efficiency gains and customer benefits from PBR.  PEG will use statistical research to study the extent of the problem and consider possible plan design remedies. PEG President Mark Newton Lowry commented that “PEG greatly appreciates the opportunity the OEB is providing for us to do unbiased research on power distributor cost and stay at the cutting edge of the PBR field.”