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).

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 Moreover, these reports quickly become outdated as PIMs in other states evolve and as new PIMs are adopted.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. 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.