How much — and how fast — will Colorado change its utility business model?
“Just because a utility has comparatively favorable rates and reliability metrics does not necessarily mean it is managing all assets and processes well,” R Street Institute Director of Energy and Environmental Policy Devin Hartman said in an email to Utility Dive. “A big challenge in peer comparisons is the baseline — in an industry with chronically poor performance, even the stronger performers have much room for improvement but it’s not reflected in a lot of metrics.”
The R Street Institute is a think tank that has filed a notice to appear in Colorado’s PBR proceeding, and has also been involved in an ongoing PBR case in Minnesota.
Chris Villarreal, an associate fellow with the R Street Institute, told Utility Dive that reforms to the traditional model can be made gradually, without dramatically upsetting the status quo.
Research shows that a way to implement PBR “is to start small,” he said, by beginning with a few targeted metrics, and over time introducing more. PBR should also not be viewed as the sole option for reform, and should be accompanied by other efforts like distribution planning to ensure that reliability is maintained, Villarreal said.