An Evaluation of Incentive Regulation for Electric Utilities

This empirical study examines the determinants and impacts of incentive regulations introduced by utility commissions in the late '70s and early '80s. Rewards for generating plant utilization and low heat rates were found to have been introduced in states whose firms exhibited relatively high managerial slack (or relatively higher costs). However, the empirical results did not find that the introduction of specific cost component incentives improved overall operating cost Performance