Scorecards for Utilities and Regulators

Benchmarking is one of several regulatory tools to encourage continuous improvement of water utility operations and to evaluate utility performance. Regulators of water utilities can use benchmarking, in conjunction with incentive regulation, to reward efficient utilities that provide high quality service. However, benchmarking requires careful planning. This article, the fourth in a series about the best practices of independent regulatory commissions, outlines the issues regulators might consider in adopting a benchmarking program. Over time, the resulting scorecards also provide an index of regulatory performance.