Performance-Based Ratemaking (PBR)

Energy utilities’ revenues are adjusted based on their performance. Incentives are set for utilities to meet or exceed benchmarks that are determined for certain operations, such as service and safety. If the utility doesn’t meet the benchmark for a given measurement, the utility must absorb the extra costs. If it meets or does slightly better than the benchmark, it keeps the profits and shares them with shareholders; if they exceed the benchmark by determined margins, money is returned to customers. More information is available in a separate document on the PUC’s website.