In the energy industry, this refers to the process of creating a regulatory environment which sets energy rates or utility company profit ceilings based on the utility's ability to meet certain regulated performance standards. The criteria used to determine rates or profit ceilings typically include emission control, public benefits, labor practices and cost of service, among many others. Actual rewards for meeting PBR targets differ from jurisdiction to jurisdiction. In one region, firms meeting PBR criteria may be allowed to reduce or maintain their energy rates. In another, they may simply be allowed to operate under fewer legislative restrictions.

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