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About: Performance-based regulation     Goto   Sponge   NotDistinct   Permalink

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Type: programming language New Facet based on Instances of this Class

Performance-based regulation (PBR) is an approach to utility regulation designed to strengthen utility performance incentives. Thus defined, the term PBR is synonymous with incentive regulation. The two most common forms of PBR are award-penalty mechanisms (“APMs”) and multiyear rate plans (“MRPs”). Both involve mathematical formulas that can lower regulatory cost at the same time that they encourage better performance. This constitutes a remarkable potential advance in the “technology” of regulation. Economic theorists whose work has supported the development of PBR include Nobel prize-winning economist Jean Tirole.