Performance Incentive Mechanisms (PIMs) Database

A performance incentive mechanism (PIM) is a regulatory tool that ties a portion of utilities’ earnings to the utilities’ performance on desired regulatory outcomes, offering utilities opportunities to create the programs and services needed to advance emerging priorities.

A PIM generally has three key components – a metric, a target, and a financial incentive. The metric is a quantitative unit of measurement. The target is a threshold of performance against the metric that the utility is intended to achieve or exceed. There can be one or more targets to a PIM, and some PIMs – particularly shared savings incentives – are structured in such a way as to not have a target. The financial incentive is either a reward or a penalty in the form of utility earnings ($) that the utility becomes eligible for based on their achievement relative to the metric and target(s).

You’ll find information about PIM design for every entry in the database, and information on the utility’s performance in the “Details” section for PIMs whose utility performance data is publicly available. If you would like to contribute to the PIMs Database or have corrections or additions to suggest, please contact the team through the contact form below and include a reference to the unique identifiers (ID) of the PIM(s) for which you are writing.

As states increasingly adopt PIMs, those involved in proceedings where PIMs are designed frequently seek out examples of existing PIMs to inform design discussions in their own jurisdiction. However, information on PIMs is dispersed in document management systems of Commissions across the country, making the information challenging to track down, analyze, and compare. Until now, advocates, utilities, and regulators considering PIMs have relied upon experts and consultants to write reports summarizing, comparing, and/or analyzing PIMs in other states. However, these reports are rarely comprehensive, which leads to bias in the information presented to decision-makers. Moreover, these reports quickly become outdated as PIMs in other states evolve and as new PIMs are adopted.

The RMI PIMs Database now provides a convenient source for all stakeholders to easily and quickly reference PIMs in place in other jurisdictions for a variety of emergent topics.

A PIM is one of many regulatory tools in the performance-based regulation (PBR) toolbox. PBR and PIMs have been around for quite a while. PIMs for service quality, energy efficiency (measured in kWh or therms), and reliability (measured using common industry indices, such as system average interruption duration and frequency, for example) are quite common. However, PIMs that align the utility’s business incentives with the broader interests of society are burgeoning and evolving as we speak. For this reason, RMI has focused its attention on PIMs that motivate utility improvements in areas that represent novel expectations for utility performance.

The database will be updated annually as new PIMs are proposed, become active, and sunset, and as new performance data is integrated. We are constantly working to improve the database, so please contact us with input, potential edits, or suggestions. If you notice an omission, inaccuracy, or have an update on PIMs in your jurisdiction, please send them to PIMsdatabase@rmi.org or use the contact form below. Please include a reference to the unique identifiers (ID) of the PIM(s) for which you are writing.

There are three reasons why a PIM might not have performance data in the database:

• The performance data isn’t ready yet: PIM performance data takes time to be verified, so PIMs that started in the current year, or the year prior, generally do not have performance data available. Even PIMs that have been in place for several years might not have performance data if the PIM is cumulative. A cumulative PIM is one with performance that will be assessed in a specific year — usually the last one — over a multi-year performance period (e.g., total count of customers served by a program over a five-year period). In some cases, utilities report interim year performance for cumulative PIMs, but not always.
• It’s challenging to track down: Tracking down utility performance reporting filings in dockets can be challenging. In some cases, RMI was unable to find publicly reported performance data. Where we couldn’t find performance data ourselves, we reached out to local stakeholders, including the utilities, to request their support in filling information gaps, which was occasionally fruitful. However, just because RMI analysts could not find a utility’s performance data does not mean the data is not publicly available. If the Database is missing data for a PIM that you know to be available, please use the contact form to let us know.
• We haven’t had time yet: In October 2024, RMI added 46 fuel cost mechanisms to the database. Many of these fuel cost mechanisms have been in place for several decades. At present, RMI is unsure whether we will integrate performance data for these fuel-cost mechanisms into the database, given the effort required. Please let us know if you feel that this would be valuable.

The performance history category field characterizes which of these circumstances is applicable to a given PIM.

Not necessarily. There are many ways to interpret a PIMs efficacy, and there can be a multitude of factors that explain or contribute to the utility’s performance to uncertain degrees. The same is also true for circumstances in which the utility earned a penalty or did not achieve a reward — there may have been other factors that contributed to the outcome. RMI intends to provide PIMs Database users insights into how to interpret PIM performance in the coming months.