Survey of regulatory agency review of generating unit performance

Regulatory agencies across the country are being called upon increasingly to monitor the management of electric utilities. Such activity, which once was relatively rare, is now common. Most frequently this oversight centers around the operating performance of generating units, both nuclear and fossil. There are, perhaps, several reasons for this increased interest in the efficient operation of generating units: increased fuel costs and fuel cost differentials, increased lead times and costs for construction of new generating units, and increased dependence on existing units because of construction programs being revised to meet decreased load growth. The monitoring of generating units has taken the form of after the fact evaluation of performance on a case-by-case basis and the implementation of productivity incentive programs. Performance standards are used in these contexts both to measure the adequacy of unit performance and to implement incentives in the form of rewards or penalties. The standard used may be a subjective test of prudent performance or some numerical index of plant performance, e.g., equivalent availability, capacity factor or heat rate. Some of the activity by regulators is reviewed in applying subjective and numerical standards and the considerations involved in applying such standards are discussed