Reprinted from March 2018
We have 50 sovereign states, five inhabited territories and 3.8 million square miles. We have 320 million people and plenty of political differences. Yet across this diverse and divisive land, from Maine to New Mexico to Washington to Florida, the principles and practices of utility regulation are held in common. Why? Here are nine possible answers—each one a lesson for our nation's leaders.
1. We don't build walls. One of the 20th century's greatest engineering achievements was the electrification of America. See National Academy of Engineering, Great Achievements and Great Challenges. Electrical interconnection made America great. Interconnection brought integration—of diverse power sources from diverse markets. Supporting that electrical integration today is institutional integration—regional transmission organizations, formed by the broad-minded: government-owned and investor-owned utilities; independent producers, transmitters and marketers; conventional and renewable sources; centralized and dispersed sources; industrial, commercial and residential customers. Big-tent thinking.
Breaking down walls, regulators build unity from diversity. That diversity promotes short-term economic efficiency (by substituting low-cost power for high-cost power); long-term cost savings (by making winter peaking capacity available for summer peak loads); clean air (by displacing high-polluting sources with low-polluting sources); and mutual support (as teams from fair-weather regions help restore service in storm-ravaged regions). Diversity supports a common goal: a reliable, low-polluting infrastructure for a national economy. None of this could happen without regulation—the principles and practices that align self-interest with the public interest. In regulation, we don't build walls. We build connections, because success comes not from artificial isolation but from joint performance.
2. We don't discriminate. Ever since the Interstate Commerce Act of 1887, every regulatory statute has prohibited discrimination. Immigrant or native; Jewish, Christian, Muslim, Hindu, atheist or agnostic; red, purple or blue: Regardless of race, ethnicity, age or sexual orientation, every like customer receives like service on like terms. Microeconomics 101 tells us why . . .
