UTILITY MODELS: QUESTIONS FOR REGULATORS AND STAKEHOLDERS TO ASK AND ANSWER AS UTILITIES EVOLVE

This guide provides a structured list of questions for state policymakers and stakeholders to evaluate utility regulatory models, specifically comparing cost of service regulation and performance regulation in the context of evolving power system goals.

• For states utilizing cost of service regulation, the document suggests evaluating whether current financial structures incentivize activities that provide coordinated solutions for future utility challenges and whether these incentives align with environmental performance, reliable service, and reasonable rates.
• The guide encourages regulators under cost of service models to consider if utilities should remain the sole electricity providers or if they should enable roles for third-party providers and customers, while also analyzing the impact of utility monopsony incentives.
• For states considering performance regulation, the document emphasizes the need for clearly defined goals, quantitative metrics that can be verified with data, and the identification of stakeholders to be consulted in defining those goals.
• When designing performance regulation, the document advises assessing the use of incentives and penalties, the financial impact on the utility, and whether a higher return is appropriate if utilities assume more risk to facilitate the energy transition.
• The guide suggests that performance regulation frameworks should consider the trade-off between tying metrics closely to goals and ensuring performance is within the utility's control, as well as normalizing performance against factors like weather or regional economic development.

APA

Lehr, R., & Aggarwal, S. (2017). UTILITY MODELS: QUESTIONS FOR REGULATORS AND STAKEHOLDERS TO ASK AND ANSWER AS UTILITIES EVOLVE. Energy Innovation. https://energyinnovation.org/wp-content/uploads/UtilityRegModels_QuestionsList.pdf

Chicago

Lehr, Ron, and Sonia Aggarwal. UTILITY MODELS: QUESTIONS FOR REGULATORS AND STAKEHOLDERS TO ASK AND ANSWER AS UTILITIES EVOLVE. Energy Innovation, 2017. https://energyinnovation.org/wp-content/uploads/UtilityRegModels_QuestionsList.pdf.

Wikipedia

{{cite report |last1=Lehr |first1=Ron |last2=Aggarwal |first2=Sonia |title=UTILITY MODELS: QUESTIONS FOR REGULATORS AND STAKEHOLDERS TO ASK AND ANSWER AS UTILITIES EVOLVE |publisher=Energy Innovation |date=February 2017 |url=https://energyinnovation.org/wp-content/uploads/UtilityRegModels_QuestionsList.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{lehr2017utility, author = {Lehr, Ron and Aggarwal, Sonia}, title = {{UTILITY MODELS: QUESTIONS FOR REGULATORS AND STAKEHOLDERS TO ASK AND ANSWER AS UTILITIES EVOLVE}}, institution = {Energy Innovation}, year = {2017}, month = feb, url = {https://energyinnovation.org/wp-content/uploads/UtilityRegModels_QuestionsList.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }