CENTER FOR URBAN POLICY AND THE ENVIRONMENT - NAWC

Indiana University + School of Public & Environmental AffairsCenter for Urban Policy & the EnvironmentAnother important issue related to performance and regulation is how to coordinate andconsolidate expectations about performance from different regulatory bodies. The statecommissions do not control all aspects of utility performance; nor do they provide the onlyperformance incentives. Consistent performance expectations from different state regulatorswould make it easier for utilities to comply with performance standards effectively and efficiently.With or without overall regulatory reform, performance expectations could be made clearer andmore consistent.The new emphasis on performance is as salient for the water industry as it is for the otherutility industries. For water utilities, improving performance involves formulating strategicresponses to a changing environment. Performance also is intrinsically related to public trust.Customers and regulators will continue to expect a high level of performance from water utilitiesbecause of the essential nature of water service. Water utilities and regulators should engage in adialogue about the appropriate use of performance assessment and incentives in the context oftraditional regulation, as well as in the context of alternative regulatory frameworks.Discussion Questions~ What aspects of water utility performance are most important today?~ What barriers stand in the way of optimal performance by the U.S. water utility industry?~ What performance incentives can economic regulators provide? What disincentives can theyremove?11