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Performance Based Regulation Report

2016 PA 341, Sec. 6u requires the Commission to commence a study addressing performance-based regulation (PBR), under which a utility’s authorized rate of return would depend on the utility achieving targeted policy outcomes.  Commission staff will initially collaborate with stakeholders on this topic including representatives of each customer class, utilities whose rates are regulated by the Commission and other interested parties.

The Commission provided a report to the Governor and Legislators on April 20, 2018 based on the result of the study conducted under this section by April 20, 2018.


Staff Lead

Patrick Hudson



  • Internal MPSC workgroup collected and reviewed pertinent literature
  • Five stakeholder meetings have been held
  • Stakeholder participation has included utilities, AG’s office, other organizations and non-profit agencies
  • Outside resources including the Brattle Group, Accenture and the Regulatory Assistance Project have participated with the stakeholder sessions
  • MPSC workgroup has assembled a draft PBR report for stakeholder and Commission review
  • Final PBR report and accompanying appendices delivered to the Governor and Legislators on April 20, 2018


Task Reports

PBR Report: Report on the Study of Performance-Based Regulation

Appendices to the Report of Performance-Based Regulation (Appendices A-G)

Appendix H, Incentive Regulation of Distribution Utilities: Theory and Practice


Task Events

November 8, 2017

PBR Stakeholder Forum Agenda | Presentation

September 29, 2017

Deadline for Stakeholder feedback on Draft Outline Stakeholder feedback

August 28, 2017

Stakeholder Feedback Session Agenda

August 11, 2017

Agenda | Staff Presentation PBR Theory

July 24, 2017 

PBR Kickoff Meeting Agenda | Staff Presentation PBR Report Overview | RAP PBR Options for Michigan | Draft PBR Report Outline | RAP PBR Presentation | Staff PBR Theory presentation abbreviated | Consumers Energy Presentation | DTE Energy Presentation

March 13, 2017

PBR Workgroup Presentation


Task – Related Documents

Prioritized Outcomes, Regulatory Options, and Metric Development for Performance-Based Regulation in Hawaii
Stakeholder Comments on PBR Draft Report
Follow-up Stakeholder Feedback
Draft Outline
Initial Draft Outline and Bibliography Initial Comments
PBR Timeline
Performance Based Regulation Plans, Goals, Incentives and Alignment
Next Generation Performance Based Regulation
Reforming Electricity Regulation in New York State: Lessons from the United Kingdom
Alternative Regulation for Emerging Utility Challenges: 2015 Update
Performance-Based Regulation in a High Distributed Energy Resources Future
Performance-Based Regulation for Pennsylvania
ELCON Performance Based Regulation 
State Performance-Based Regulation Using Multiyear Rate Plans for U.S. Electric Utilities
Performance-Based Regulation Options