PBR is becoming very popular across North America because it significantly reduces a utility's expensive and time-consuming reporting and regulatory work for a couple of years while incentivizing the implementation of cost efficiencies through a savings-sharing mechanism that splits the money saved between the ratepayers and the utilities' shareholders.

So far, so good. It sounds a bit complicated but this is a win/win, right?

Well...once you go behind that attractive rhetoric, the answer is "not necessarily". We all know that in a capitalist system, businesses push for maximum return for minimum investment and PBR's are not an exception to that rule. Without the checks and balances put in place by the regulator to monitor service quality, the natural tendency is for utilities to cut too close to the bone for customer or Unions' comfort: reducing staff and resources to perform at the bare minimum - and I do mean minimum - required to collect the efficiency bonus for their shareholders after they set service quality levels so low that it would be a challenge not to meet them.

So how do service quality indicators and PBR's affect thee? Ah...let me count the ways:

1. Jobs are lost to increase the efficiency bonus for the shareholders.

2. To save money, the utility will be tempted to defer necessary upgrades to its systems until the PBR ends, potentially compromising its ability to service its customers in a reasonable, safe and reliable manner in the interim.

3. Those workers who do keep their jobs are required to do more work with less resources and support, often with little to no regard for whether those expectations are realistic or sustainable.

4. To bring about these reductions in staff, Utilities have to blur and/or expand the job descriptions of those employees they wish to keep on payroll to ensure no vital tasks are orphaned. This almost always creates a significant number of grievable issues, particularly when there is more than one bargaining unit within the utility and even more so when more than one Union is involved.

5. Worker fatigue ensues and absenteeism and burnout increase.

6. Ratepayers often see the amount of time they wait for their calls to be answered increase, their outages last longer, and other aspects of their service deteriorate while the utility is still somehow able to earn its efficiency bonus.

7. Unions can see their Collective Bargaining processes stifled by the utility's drive to earn its shareholders their bonus.

8. Unions can see the utility's priorities shift away from programs designed to promote or improve member health and safety.

In the end, if you are a utility ratepayer or a union representing utility workers operating under a PBR, then these issues really do affect you.

So how do you ensure your service or your members aren't unfairly compromised? You get informed and then you come to the table and you fight for your rights, your jobs, and your utility.

Leigha Worth practices utility regulation, labour, human rights and privacy law at Allevato Quail & Worth.

The content of this post is intended to provide a general guide on the subject matter. Specialist advice should be sought about your specific circumstances.