March 30th, 1999

The task force (TF) discussed what might be achievable in the first generation PBR plan considering the lack of uniformity of information going into the plan. Measurement of performance against a utility's own historic performance rather than by grouping was discussed for the first generation plan. For the service reliability standards the use of the CEA national averages as a safety net was suggested. A possible financial consequence of coming short of a standard in terms of having the shareholder reinvest to cover the cost of coming up to standard was discussed. Note was made that enforcement of the standards would be difficult unless there is some form of enforcement mechanism. Thus a process needs to be in place by which the Board would require explanation when a utility's performance falls below the minimum requirement. This process should include description of utility's remedial action. The proposed time line for the implementation of PBR was described. In addition a process was proposed for the Board's public consultation on the draft Rate Handbook, as well as for the review of the individual utility's evidence in support of their rate application. The use of interim rate orders to streamline the review of evidence from a large number of distributors without causing a delay in the implementation of the PBR plans was proposed. The subject of earnings-sharing was then broached including a discussion on an asymmetric earnings-sharing mechanism. 


Further development on earnings-sharing mechanism and enforcement was identified. A preliminary analysis of the utility's survey on service quality performance indicators will be prepared for the next meeting by Board Staff. 
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