This report from Rocky Mountain Institute, published in July 2020, reviews select examples of PIMs (performance incentive mechanisms) and provides a simple taxonomy of the results to identify important lessons for future PIM development. By exploring why some PIM proposals are rejected by regulators and others are accepted, as well as what happens to PIMs after acceptance, lessons can be learned about how these regulatory tools can best be leveraged in a shifting electricity landscape. Recommendations are provided regarding the need to leverage data, align incentives, focus on outcome-based PIMs, prioritize flexibility and learning, and support stakeholder participation. Barriers to success are discussed and examples are provided.
Key words: smart grid, research & development, utilities, energy management, regulatory policy, market sizing