Natural Gas Producers Suggest Ways to Evaluate Performance-Based Regulation

NATURAL GAS SUPPLY ASSOCIATION

805 15th Street N.W., Suite 510
Washington, D.C. 20005

FOR IMMEDIATE RELEASE
DATE: February 14, 1997

CONTACT:

Charlotte LeGates

PHONE: 202/326-9316

FAX: 202/326-9334

Natural Gas Producers Suggest Ways to Evaluate Performance-Based Regulation

WASHINGTON, DC -- The Natural Gas Supply Association has mailed a paper to state public utility commissions (PUCs) suggesting factors they may wish to use when evaluating performance-based regulatory programs for local distribution companies (LDCs). Performance-based regulation (also called "incentive" or "alternative" regulation) links specific rewards with specific targets or benchmarks.

The paper, which updates previous NGSA suggestions on the topic, advocates performance-based regulatory approaches that:

Provide quantifiable benefits to all parties.
Pair reward with risk.
Include all of a utility's costs and revenues, not just gas commodity costs.
Include explicit service and safety standards.
Begin by "clearing the decks" of inequities such as cross-subsidies among services or customer classes.
Focus on macroeconomic objectives and avoid problems such as distorting the transmission of market signals or inhibiting maximum use of the distribution system.
Contain monitoring and compliance requirements.

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EDITORIAL NOTE: The complete four-page paper is available to reporters; please call the NGSA receptionist, 202/326-9300. It will be available to the public on the Internet at <www.ngsa.org> beginning Friday, Feb. 14.

This page was last updated August 31, 1997.