How PIM Evaluation Can Level Up

This policy brief by RMI provides four recommendations for Public Utility Commissions (PUCs) to improve the evaluation of Performance Incentive Mechanisms (PIMs). The document emphasizes the need for recurring evaluations, transparency through public dashboards, portfolio-wide assessments to avoid duplication, and the use of design guidelines to measure net benefits to customers.

• PUCs should implement recurring evaluations of PIMs and increase transparency using web-based dashboards. While some states evaluate PIMs during rate cases or annual reporting, public access is often limited by redacted sections. Dashboards, such as those used by Hawaiian Electric, allow regulators and stakeholders to track metrics and scorecards, which can lead to policy actions like the Hawaii PUC's investigation into disconnection reform based on a "Disconnections Reported Metric".
• Evaluating PIMs as a collective portfolio rather than in silos prevents the duplication of efforts and the waste of ratepayer funds. RMI suggests using standardized filing requirements and internal cross-training for staff to track total potential basis points. For instance, New York's REV Track 2 Order limited new incentives to a maximum of 100 basis points to encourage portfolio-level testing.
• Establishing informal, non-contested spaces for dialogue can reduce the administrative burden on PUC staff and incorporate diverse stakeholder perspectives. Community-based organizations and consumer advocates can provide insights into affordability and equity, while distributed generation companies can offer expertise on DER interconnection PIMs. Illinois has used informal workshops to support the development of metrics following the Climate and Equitable Jobs Act.
• Existing PIM design guidelines can be repurposed as evaluation frameworks to determine if mechanisms are advancing desired outcomes. In Rhode Island, principles require that incentives enable a comparison between the cost of achieving a target and the "potential quantifiable and cash benefits". Similarly, Illinois law mandates that the Illinois Commerce Commission develop a methodology to calculate net benefits, including societal costs and effects on delivery rates.

APA

RMI (2025). How PIM Evaluation Can Level Up. https://rmi.org/resources/how-pim-evaluation-can-level-up/

Chicago

RMI. How PIM Evaluation Can Level Up. 2025. https://rmi.org/resources/how-pim-evaluation-can-level-up/.

Wikipedia

{{cite report |author=RMI |title=How PIM Evaluation Can Level Up |date=6 August 2025 |url=https://rmi.org/resources/how-pim-evaluation-can-level-up/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{rmi2025how, author = {{RMI}}, title = {{How PIM Evaluation Can Level Up}}, institution = {RMI}, year = {2025}, month = aug, url = {https://rmi.org/resources/how-pim-evaluation-can-level-up/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }