Effective Regulation of Public Utilities

Each November, families give thanks for what enriches their personal lives. For those of us in utility regulation, there also are many thanks to give. Here are ten examples: 

Ownership diversity:  We have utilities owned by investors, by consumers, and by federal, state, county, city, and town governments.  In their scatterplot of failures and successes, no data point is static.  This gives the lie to worn-out rhetoric about “public vs. private,” and induces humility in those who are certain of solutions (like some of Montgomery County, Maryland’s outage sufferers, who wanted public ownership of the investor-owned Potomac Electric Power Company; and Newsday, the paper of record for Hurricane Sandy-tortured Long Island, which sought investor ownership of the government-owned Long Island Power Authority).  Let the comparisons continue. 

Professional consumer advocacy:  Egregiously absent from most nations’ regulatory systems, our brand of tax-funded and rate-funded consumer advocacy ensures alternative views presented by professional practitioners.  Exemplified by such icons as former Pennsylvania Consumer Advocate Sonny Popowsky, former New Hampshire Commissioner Nancy Brockway, the low-income advocate Roger Colton, and the binomened West Virginian Billy Jack Gregg, our system persists; even while under-funded, tolerated but only minimally supported by tax-frightened politicians. 

It is a system in which captive ratepayers pay for shareholder advocacy while legislative budget-cutters lower the level of consumer advocacy.  The result is hearing rooms where $500/hour private lawyers battle $50/hour government lawyers, and utility witnesses outnumber consumer witnesses 4 to 1.  To bridge that distance even halfway would better balance utility-heavy hearing records with expertise aimed at values broader than “return on equity” and “competitive positioning”; values like consumer education, consumer choice, and calibrating utility compensation to utility performance.