New Book for Regulatory Practitioners


For over a century, the law of public utility regulation has supported and disciplined the nation's infrastructural industries. Regardless of sector or era, all utility law has shared five features: its mission (to align private utility behavior with the public interest); its diversity (from state law exclusive franchises to federal protection of shareholder investment); its reliance on multiple professions (economics, accounting, engineering and finance); its sources (constitutions, statutes, regulatory orders and appellate opinions); and its flexibility (accommodating multiple market structures and public purposes).

New policy challenges are stretching regulation's legal boundaries. Commissions accustomed to processing rate cases are facing questions over climate change, universal broadband service, data privacy, microgrids, industry concentration and terrorism protection. The resulting tensions are both ideological (private vs. public ownership, government vs. markets) and jurisdictional (national standards vs. state experimentation). At stake are trillions of investor and consumer dollars.  This treatise organizes a century of legal principles to help the regulatory profession resolve these tensions and fashion new policies. Its mix of case narratives and doctrine, drawn from all legal sources, is geared to lawyers and non-lawyers, veterans and novices, practitioners and decisionmakers, academics and the media—anyone seeking to use the law to serve the public interest.

Regulating Public Utility Performance is used or has been used as a text at the following law schools:

  • University of Arkansas Law School
  • Georgetown University Law Center
  • Washington University
  • University of Tulsa
  • Vermont Law School
  • University of Hawaii

This first of two volumes covers market structure (monopolies, competition and the transitions between the two); pricing (including the distinctions among fair compensation, scarcity pricing and price-gouging); and jurisdiction (including the mismatch between bright jurisdictional lines and blurry market boundaries). The second volume will address corporate structure, mergers and acquisitions.


“a comprehensive regulatory treatise …. In all respects, it merits comparison with Kahn and Phillips.”  (Infrastructure, Vol. 53, No. 2. Winter 2014)


Table of Contents

Click on blue links for excerpts.

Chapter 1—Regulatory Law: Purposes, Powers, Rights and Responsibilities
1.A. Purposes of Regulation
1.B. Purposes of Regulatory Law
1.C. Subjects and Sources of Regulatory Law


PART ONE
Market Structure: From Monopolies to Competition—Who Can Sell
What to Whom?

Chapter 2—The Traditional Utility Monopoly
2.A. Exclusive Retail Franchise
2.B. Obligation to Serve
2.C. Consent to Regulation
2.D. Quality of Service
2.E. Eminent Domain
2.F. Limited Liability for Negligence

Chapter 3—Authorizing Competition
3.A. Historical Summary
3.B. Eliminating the Legal Monopoly at Retail
3.C. Constitutional Questions

Chapter 4—Making Competition Effective
4.A. “Effective Competition”: Definitions, Goals and Metrics
4.B. Unbundling: Reducing the Incumbent's Control of "Essential Facilities"
4.C. Reducing Non-Facility Entry Barriers

Chapter 5—Monitoring Competition for Anti-Competitive Behavior
5.A. Anti-Competitive Pricing
5.B. Tying
5.C. Market Manipulation
5.D. Rethinking Separation


PART TWO
Pricing: How Much Can Sellers Charge—and Who Decides?

Chapter 6—"Just and Reasonable" Prices in Non-Competitive Markets:
Cost-Based Rates Set by the Regulator

6.A. The Rate-Setting Equations
6.B. The Meaning of “Just and Reasonable”
6.C. Imprudent Actions and Inactions: Who Bears the Costs of Inefficiency
        and Waste?
6.D. Prudent Actions but Uneconomic Outcomes: Who Bears the Cost of
        Bad Luck?
6.E. Variations on Cost-Based Rates
6.F. Departures from Cost Bases


Chapter 7—"Just and Reasonable" Prices in "Competitive" Markets:
Market-Based Rates Set by the Seller

7.A. Seller-Set Prices Can Be “Just and Reasonable”—If Seller Lacks Market
        Power
7.B. The Courts Speak: To Prevent Market Power, Regulators Must Screen and
        Monitor
7.C. The Agencies Act: Techniques and Procedures for Screening and
        Monitoring
7.D. Are Scarcity Prices Just and Reasonable?
7.E. The Future of Market-Based Rates


Chapter 8—Discrimination: When Is Favoritism "Undue"?
8.A. Undue Discrimination
8.B. Due Discrimination
8.C. Cost Allocation Within Holding Company Systems


Chapter 9—Filed Rate Doctrine: The "Rate on File" Is the Only Lawful Rate
9.A. Filed Rates: Purposes and Principles
9.B. Commission Decisions Constrain Courts
9.C. Federal Commission Decisions Constrain State Commissions
9.D. Commissions Must Respect Their Own Rates
9.E. Application to Market-Based Rates
9.F. Application to Antitrust Law
9.G. Application to Non-Rate Terms and Conditions
9.H. Fraud Does Not Block the Filed Rate Defense


Chapter 10—Retroactive Ratemaking: The Prohibition and The Exceptions
10.A. Three Bases
10.B. Four Illustrations
10.C. Seven Exceptions


Chapter 11—Mobile-Sierra Doctrine: When Does Contract "Sanctity" Give
Way to Government-Ordered Amendments?

11.A. Principle: The Commission Cannot Let Parties Out of Their Contracts
11.B. The "Public Interest" Exception
11.C. One Standard—with a Rebuttable Presumption
11.D. Three Ways to Preserve the Regulator's Role
11.E. Escape From the Presumption: Fraud, Duress, Illegality
11.F. Special Applications


PART THREE
Jurisdiction: State, Federal and Future

Chapter 12—The Federal–State Relationship
12.A. Limits on Federal Action
12.B. Limits on State Action
12.C. Regulating Within the Limits: Six Models of Federal–State Interaction


Chapter 13—Jurisdiction’s Future
13.A. Market Structure
13.B. Pricing
13.C. Federal–State Jurisdictional Relationships
13.D. Corporate Structure and Changes in Control