The New York Public Service Commission (PSC) has canceled efforts to develop a performance incentive mechanism for costs associated with the Nine Mile 2 nuclear power plant. The efforts stemmed from a 1993 settlement that determined recoverable plant operation and maintenance costs. The PSC said its staff had withdrawn from ongoing incentive negotiations, citing a "change in emphasis" from specific to broad-based incentives in electric regulation. The staff had uncovered the possibility of "perverse economic incentives" through an economic life study of an incentive mechanism in place for the Nine Mile 1 facility. The staff also concluded that efficiency goals could be achieved through existing mechanisms, such as fuel-cost targets to improve plant capacity factor and careful use of the existing annual rate allowance process. Re Performance Incentive Program for the Nine Mile 2 Nuclear Power Plant, Case 93-E-0018, Sept. 8, 1995 (N.Y.P.S.C.).
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