Efficiency programs often fall short because they don’t account for human behavior. Systematic studies with randomized trials can bring better results.
Ontario's Failed Experiment (Part 2)
Service quality suffers under PBR framework.
Regulation in Ontario , February 2008.
21. Tyler Hamilton, “Wave of Hydro Mergers Forecast,” Toronto Star , Oct. 21, 2006.
22. Cronin, F. J. and S. Motluk, Modeling Electric Distributor Costs, Investment, and Reliability, (in process). We used Ontario LDCs’ data to estimate a three-equation model. We find that LDCs with higher O&M expenditures also have higher reliability (lower SAIDI, etc.). Older networks, networks with lower shares of underground lines, and networks with less capital tend to have lower reliability.
23. See Ottawa Hydro Holdings, Inc., 2006 Annual Report , p.22 for a discussion of a rolling average to set reliability standards. We might note that in this case, the LDC’s reliability performance is good.