Debunking the mythology of PBR in electric power

PBR in the electric power industry has failed to gain the traction that incentive regulation experienced in the telecommunications industry. We do not believe institutional differences between the two industries fully explain why PBR has not gained the footing that the economics literature suggests that it should. It is time to debunk several myths that pervade industry and regulatory thinking on the merits of PBR that have had a deleterious effect on its adoption.