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ROE adders and metrics discussed; stakeholders press for clearer KPIs and verification
Summary
Participants discussed existing performance adder mechanisms, the pending SCC proceeding on performance adjustments, and pushed for clearly defined metrics, measurement and verification. Several suggested third‑party program administrators as an alternative to utility‑run efforts.
Stakeholders reviewed Virginia’s statutory performance adder provisions and a pending SCC proceeding that would evaluate more comprehensive performance‑based ROE adjustments. Participants noted two statutory adder concepts: longstanding adder language for certain generating performance measures and a more recent mechanism that would permit roughly a ±50‑basis‑point ROE adjustment under a statewide proceeding; neither has been widely used to date.
Patrick Carr (SCC accounting) reminded participants that the separate docket (PUR202300210) remains pending and that staff had filed a report in March. Stakeholders emphasized that, before adopting PIMs or ROE adders at scale, the state needs clear, observable key performance indicators (KPIs) and robust measurement‑and‑verification so that claimed performance can be audited and linked to compensation.
Several participants proposed third‑party or independent program administrators to achieve performance goals (for example, an energy‑efficiency utility similar to DC’s DCSEU or Oregon’s Energy Trust). Proponents argued such entities can be run on strict performance contracts with explicit penalties for nonperformance, and that this approach isolates program delivery from utility capital incentives.
The group called for further work on how PIM rewards interact with base ROE and other incentives to avoid double incentives that could raise rates without proportionate public benefit. SCC staff and stakeholders agreed to consider clearer KPI definitions and reporting protocols in their forthcoming written inputs.
