Performance-Based Regulation: Getting Down to Business Model Reform in Colorado

Following 2019 legislation to decarbonize Colorado's electricity sector, the Public Utilities Commission (PUC) must investigate whether transitioning to performance-based regulation (PBR) is 'net beneficial'. The briefing suggests that the PUC should utilize scenario analysis and collaborative stakeholder processes, drawing on examples from Hawaii, Minnesota, and Oregon to align utility incentives with goals such as emissions reductions and cost-efficiency.

• Colorado's 2019 legislative actions established a goal of 100 percent greenhouse gas emissions reduction for the electricity sector by 2050 and an economy-wide reduction of 90 percent below 2005 levels by 2040.
• Under Section 11 of S.B. 236, the Colorado PUC is tasked with determining if a performance-based regulation (PBR) model is 'net beneficial' and how it can align utility operations with five specific goals: safety, reliability, cost-efficiency, emissions reductions, and DER expansion.
• The document recommends that the PUC use scenario-based analysis, including a 'do-nothing' scenario, to evaluate the net benefits of PBR due to the high level of future uncertainty.
• The briefing highlights precedents from other states: Hawaii's study suggested PBR could lower residential rates between 2018 and 2045; Minnesota's PUC used a conceptual framework from the Attorney General's office; and Oregon's investigation focused on customer choice, economic efficiency, access, and a low-carbon future.

APA

RMI (2019). Performance-Based Regulation: Getting Down to Business Model Reform in Colorado. https://rmi.org/resources/performance-based-regulation-getting-down-to-business-model-reform-in-colorado/

Chicago

RMI. Performance-Based Regulation: Getting Down to Business Model Reform in Colorado. 2019. https://rmi.org/resources/performance-based-regulation-getting-down-to-business-model-reform-in-colorado/.

Wikipedia

{{cite report |author=RMI |title=Performance-Based Regulation: Getting Down to Business Model Reform in Colorado |date=18 September 2019 |url=https://rmi.org/resources/performance-based-regulation-getting-down-to-business-model-reform-in-colorado/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{rmi2019performancebased, author = {{RMI}}, title = {{Performance-Based Regulation: Getting Down to Business Model Reform in Colorado}}, institution = {RMI}, year = {2019}, month = sep, url = {https://rmi.org/resources/performance-based-regulation-getting-down-to-business-model-reform-in-colorado/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }