While investigating the "build versus buy" issue, the Oregon Public Utility Commission (PUC) has upheld its existing least-cost planning and competitive-bidding regulations. The PUC rejected proposals to alter its existing integrated resource planning process by adding "market-test" or shared-cost-savings incentive regulation. Proponents said that the proposals were necessary to counteract a tendency by utility management to favor construction to boost rate base.
The PUC adopted a staff recommendation that it resist a move toward incentive regulation until parties conclusively demonstrate that a new form of regulation would both improve utility performance and benefit ratepayers. Staff cited problems in implementing and measuring the results of incentives used by electric utilities to promote demand-side management investment, and said that the current combination of least-cost planning, competitive bidding, and traditional ratemaking regulations "generally leads utilities to resource decisions that are best for their customers." Re Requirements of Section 712 of the 1992 Energy Policy Act, UM 573, Order No. 94-1611, Oct. 30, 1994 (Or.P.U.C.).
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