The Nuts and Bolts of Performance-Based Regulation

The document introduces performance-based regulation (PBR) as a modern alternative to early 20th-century utility regulatory frameworks, which are currently challenged by the rise of renewable energy, distributed energy resources, and electrification. PBR is presented as a mechanism to align utility incentives with policy outcomes such as reduced emissions and improved social equity.

• Traditional utility regulatory frameworks, designed for centralized fossil fuel power plants, are becoming inadequate due to the growth of distributed energy resources, renewable energy, and end-use electrification.
• Performance-based regulation (PBR) can be used to incentivize utilities to lower costs, create innovative programs for customers, and meet specific policy targets including reduced greenhouse gas emissions, enhanced demand flexibility, and improved social equity.

APA

RMI (2024). The Nuts and Bolts of Performance-Based Regulation. https://rmi.org/resources/the-nuts-and-bolts-of-performance-based-regulation/

Chicago

RMI. The Nuts and Bolts of Performance-Based Regulation. 2024. https://rmi.org/resources/the-nuts-and-bolts-of-performance-based-regulation/.

Wikipedia

{{cite report |author=RMI |title=The Nuts and Bolts of Performance-Based Regulation |date=3 July 2024 |url=https://rmi.org/resources/the-nuts-and-bolts-of-performance-based-regulation/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{rmi2024nuts, author = {{RMI}}, title = {{The Nuts and Bolts of Performance-Based Regulation}}, institution = {RMI}, year = {2024}, month = jul, url = {https://rmi.org/resources/the-nuts-and-bolts-of-performance-based-regulation/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }