The Wisconsin Public Service Commission (PSC) has decided to add a "performance mechanism" to its regulations governing demand-side management (DSM) efforts. The PSC found that some utilities were no longer meeting the DSM goals set in their rate cases. Utilities were not overspending to meet approved DSM goals; rather, some refused to spend all of their DSM budgets even though they had not met their goals.
Under the new performance mechanism, if a utility fails to meet at least 85 percent of its DSM goal in any year, the PSC will authorize third parties to bid to provide the remaining DSM savings to the utility's ratepayers. Ratepayers will pay for the DSM services just as if the utility were providing them. In this way, the PSC explained, the mechanism negates the current incentive for a utility to underspend on DSM and to use the remaining funds to offset a future rate increase. Re Advance Plans for Construction of Facilities, No. 05-EP-7, Dec. 19, 1995 (Wis.P.S.C.).
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