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Hawaii Gov. Ige signs law mandating performance-based utility regulation

April 25, 2018

Hawaii on Tuesday became the first U.S. state with a legislative mandate to separate utility revenues from capital expenditures.

Performance-based metrics exist in other U.S. states — like New York and Minnesota — but those efforts so far have largely stacked new incentives on top of the utility’s traditional revenue model of rate-based capital investments.

Hawaii’s law envisions a clean break. By 2020, it reads, PUC incentives and mechanisms that “directly tie an electric utility revenues to that utility’s achievement on performance metrics and break the direct link between allowed revenues and investment levels.”

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