Service quality suffers under PBR framework.
[Editor’s note: Fortnightly published Part I of this article in the July 2009 issue. In that installment, the authors described how the Energy Competition Act in 1998 restructured Ontario’s utilities and charged the Ontario Energy Board with implementing performance-based ratemaking (PBR) to maintain service quality. The author asserts that despite the board’s intentions, however, service quality has declined in the province.]
The Ontario Energy Board’s (OEB) experience with service quality regulation (SQR) of electric distributors has its origins in the OEB’s 2000 Electricity Distribution Rate Handbook. In terms of SQR, this document largely was based on the Implementation Task Force Report’s 1 recommendations.