Multi-Year Rate Plan Design for Maine
Synapse was retained by the Maine Office of the Public Advocate to develop an alternative framework for multi-year rate plans (MYRPs) and performance incentive mechanisms (PIMs) in response to the Maine Public Utilities Commission’s inquiry in Docket No. 2025-00354. In that proceeding, Christensen Associates prepared a straw proposal that was filed by Commission Staff.
Synapse’s report, MYRP Design for Maine: A Framework for Encouraging Utility Cost Control, Achievement of Policy Goals, and Customer Protection, responded to that proposal and presented a comprehensive alternative grounded in Maine’s regulatory history and national experience with performance-based regulation.
Synapse recommended adoption of a revenue-cap MYRP indexed to inflation with a productivity offset, continuation of revenue decoupling, and a stay-out period of at least five years to preserve cost-control incentives. The report also proposed strict limits on supplemental revenue mechanisms, disciplined treatment of storm and exogenous costs, an asymmetrical earnings sharing mechanism with a downside offramp, and targeted performance incentive mechanisms focused on verified peak demand reduction. The resulting framework was designed to protect customers, strengthen accountability, and better align utility financial incentives with affordability, reliability, and Maine’s electrification goals. Project ongoing.