From James Owen, Acting Public Counsel for the State of Missouri

October 4th, 2016

Performance-Based Regulation or “PBR” Not a new concept

Highly diverse

Time and context specific

Already in place in Missouri

Performance incentive mechanisms (PIMs)

More proposals have been suggested

Multi-year rate plans (MRPs)

PIMs Customer Perspective

PIMs Utility Perspective

Missouri

Energy

Efficiency

Investment

Act

The Policy Process Agenda Setting

Getting an issue to be considered by the government

Policy Making

Rulemaking and design

Implementation

Bureaucracy and adaptation

Evaluation

Assessing the policy’s effectiveness

Agenda Setting Getting an issue to be considered by the government

But what does MEEIA mean? The use of creative and aggressive evaluations to

quantify savings forces ratepayers to bear the additional financial penalty of rewarding Ameren an incentive in excess of a million dollars, millions more for future program year evaluations, and likely a precedent that will be cited by other Missouri electric (utilities) in their future MEEIA recovery.”

Dr. Geoff Marke, as quoted in 10/26/2014 St. Louis Post Dispatch

“Solid” Policy Making ? At issue is how the utility measures lost sales. (Tim)

Opitz (of the OPC) alleged Monday that Ameren had already over collected $25 million from customers in one year, and without measuring lost sales, it could continue doing so. But the utility’s demand program chief, Rick Voytas, countered later that measurement methods were subjective and the range of values “can be an ocean wide.”

7/24 2015 St. Louis Post Dispatch

Implementation Bureaucracy and adaptation

Implementation

Evaluation Assessing the policy’s effectiveness

The Consequences There's plenty of dispute over self-reporting. Last October, the

Missouri utility Ameren sparred with regulators after it claimed 70 gigawatt-hours of savings more than what independent auditors measured. Its reported savings were based on self-reported data. "When you give people money and ask if the program that gave you money worked, how do you think they'll respond?" said Energy Savvy's Guiterman. Greentech Media 06/03/2015

It’s clear Ameren Missouri has been over-compensated under Cycle 1, and it is almost certain the over-compensation would be exacerbated under the Utility Plan,” the Commission said in a statement. “However, without retrospective EM&V, it would be impossible for anyone to know how much Ameren Missouri collects from customers for energy savings that never materialized.” - Missouri Times 10/22/2015

Lessons learned? Probably not… but experience to date with PIMs show

that they are:

Time consuming

Labor intensive

Run the risk of “gaming”

And… are probably worth it?

Open and continuous dialogue with the ability to adapt and change is the ideal but often runs counter to lived experience

Contact the OPC To Discuss Further or to Call me Dirty Names, I can be

reached at james.owen@ded.mo.gov or by calling 573-751-5318.

The OPC is also trying to get its Twitter account going. Do your part by following us at @mopubliccounsel I run this myself and always looking to interact.