Modifying the PBR Framework in Hawai’i: Comments on the PUC Staff Proposal
Prepared for The Hawaiian Electric Companies
The Public Utilities Commission of the State of Hawai‘i has instituted a proceeding to investigate performance based ratemaking (PBR). The PUC Staff filed a report Staff Proposal for Updated Performance-Based Regulations, dated February 7th 2019, in Docket 2018-088. The Hawaiian Electric Companies (“the Companies”) have asked The Brattle Group to review the PUC Staff proposal, and to provide comments based on experience of PBR in other jurisdictions, and the economic theory that underpins PBR and explains the incentives it provides. This report addresses the PUC Staff recommendations relating to a multi-year rate plan, but does not address the selection and design of targeted performance incentive mechanisms (PIMs).
