Agency Adjudication: Efforts at Excellence

At Georgetown University Law Center, I teach a fall class on public utility law and a spring class on regulatory litigation. (See the syllabi here.)  Both are "practicum" classes, where we supplement the weekly seminars with student projects carried out for regulatory agencies. Each July and December I cast a net among commission colleagues, asking about substantive and procedural challenges for the students to solve. With thanks to my contributing colleagues, here are excerpts from the spring 2015 list, organized according to three distinct roles regulatory agencies play. If you have local examples of these issues to share with us, or will be interested in the solutions we come up with, or have other ideas for projects, don’t hesitate to let me know.

Agency as Policy Leader

Setting the agenda: How does an agency set agendas for the parties, rather than the other way around? Agencies can be leaders, presiders, followers or a combination. Some agencies focus on guiding parties toward public interest solutions; otherwise wait for parties' proposals, and then say "yes," "no," "yes, if" or "no, unless." Most do some combination, emphasizing one or the other approach at different times. Useful examples of leadership: The Hawaii Commission's actions to reduce fossil fuel dependency (since 2004 and continuing); and the New York Commission's efforts to explore new market structures in the distribution space (especially if the Commission continues to ask the question, "If we still need a monopoly provider of something, how do we find the best provider, rather than allow inertia to favor the incumbent?")

Managing inter-governmental relations: No agency operates in an economic, societal, legal or bureaucratic vacuum. Its decisions influence, and are influenced by, other government actors: Governor, legislature, executive departments (e.g., commerce, antitrust, zoning), courts. . . .


Testimony, Papers, and Presentations

“Regulatory capture” is a ringing phrase, too casually used. But because it is a hyperbolic phrase, it is too readily dismissed. With a careful definition, regulatory capture can be anticipated, detected, and resisted. Regulatory capture does not include illicit acts—financial bribery, threats to deny reappointment, promises of a post-regulatory career. These things all have occurred, but they are forms of corruption, not capture. Nor is regulatory capture a state of being controlled, where regulators are robots executing commands issued by interest groups.
In this proceeding before the Mississippi Public Service Commission, Entergy proposes to sell its transmission facilities to ITC at a gain. The transaction is a “spin-merge” transaction in which Entergy shareholders will end up owning 51% of ITC, along with their shares of Entergy.
Utilities are seeking to earn returns on equity above the real cost of equity. Currently, there are five strategies: (1) move assets from state jurisdiction to FERC jurisdiction; (2) use holding company debt to fund utility subsidiary equity (aka "double leveraging); (3) seek supranormal returns as "incentives" to perform normal tasks; (4) seek authorized returns that reflect certain business risks while shifting those risks to ratepayers; and (5) use "riders" reduce business risks without reducing authorized return on equity. This presentation describes these strategies.

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Regulating Public Utility Performance:  The Law of Market Structure, Pricing and Jurisdiction

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Preside or Lead?
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Hempling Appearances

Nigeria Electricity Regulatory Commission
3rd Judges’ Seminar

Telecom Forum
Asamblea Plenaria REGULATEL

NARUC Annual Meeting
Panel on State–Federal Relations

New England Electricity Restructuring Roundtable
The Future of Demand Response in New England

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While we will dearly miss you as NRRI's Executive Director—where you have been so invaluable—I am delighted that you will now be in the classroom enlightening and sparking the interest of the next generation.
— Paul J. Roberti, Commissioner, Rhode Island Public Utilities Commission