Commissions Are Not Courts; Regulators Are Not Judges

. . . [T]he Commission has claimed to be the representative of the public interest.  This role does not permit it to act as an umpire blandly calling balls and strikes for adversaries appearing before it; the right of the public must receive active and affirmative protection at the hands of the Commission.

Scenic Hudson Preservation Conference v. FPC, 354 F.2d 608, 620 (2d Cir. 1965) (referring to the Federal Power Commission), cert. denied sub nom., Consolidated Edison Co. v. Scenic Hudson Preservation Conference, 384 U.S. 941 (1966).

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Newcomers to regulation are not newcomers to government.  They understand “executive branch,” “legislative branch,” “judicial branch.”  But they wonder, “What exactly are we?”  Some respond by emulating the familiar:  Judges sit on benches, await the parties' disputes, use adversarial processes, find facts, then apply law to those facts; that seems straightforward enough; let’s make regulators like judges.

To view the commission as a court—to "preside" rather than lead—undermines regulatory effectiveness.  Here’s why.

 

How Do Commissions Differ From Courts?

A commission's purpose derives from its origins.  The legislature receives lawmaking powers from the state constitution.  The legislature then creates a commission, delegating to it some substantive slice of those lawmaking powers.  That delegation consists of commands coupled with standards; e.g., establish just and reasonable rates, ensure reliable service, allow mergers if consistent with the public interest.1  Common to these commands and standards is a single legislative purpose:  Within a defined substantive space (e.g., activities of electricity, gas, telecommunications and water utilities), make policy for the public.  That is not what courts do.

Courts and commissions do have commonalities.  Both make decisions that bind parties.  Both base decisions on evidentiary records created through adversarial truth testing.  Both exercise powers bounded by legislative line drawing.  But courts do not seek problems to solve; they wait for parties' complaints.  In contrast, a commission's public-interest mandate means it literally looks for trouble.  Courts are confined to violations of law, but commissions are compelled to advance the public welfare.  Even the narrowest of commission decisions—say, approving or disapproving a special contract between utility and industrial customer—affects a public interest larger than the parties:  Will the low contract price shift costs to other customers or weaken the utility's finances?  Will the lucky buyer's competitors seek “me too” treatment?  To what effect?

Like commissions, a court’s decisions can have policymaking attributes affecting non-parties.  A class action suit under the civil rights or securities laws, an antitrust suit against a Microsoft or an AT&T, can set policy for a generation.  But consider this difference:  In Court Land, the judge's power to act is confined to the issues stated by a plaintiff’s complaint.  In Commission Land, a party’s filing is stimulation but not limitation.  The commission can add issues, combine proceedings, invite the appearance of other parties, or convert a two-party complaint into multi party rulemaking, all as the public interest demands.

A commission does “look like” all three branches:  like a legislature when promulgating rules; like an executive agency when enforcing those rules; like a court when deciding complaints.  But utility commissions are not "like" anything; they are what they are: governmental units created to exercise powers delegated to the legislature by the Constitution, then re-delegated by the legislature to the commission.  Commissions, like the legislatures whose powers they exercise, make policy for the public.

Services

Testimony, Papers, and Presentations

The testimony relates to AltaGas’s proposed acquisition of WGL Holdings, Inc. and Washington Gas Light Company.
The testimony addresses the following: the effect of the transaction on consumers, including: (1) reasonableness of the purchase price, including whether the purchase price was reasonable in light of the savings that can be demonstrated from the merger and whether the purchase price is within a reasonable range; (2) whether ratepayer benefits . . .
Testimony addresses the issues of whether the proposed transaction affects the interests of ratepayers; the ability of JCP&L and MAIT to provide safe, adequate, and proper utility service at just and reasonable rates; and whether the proposed transaction is in the public interest.
This expert report was submitted to a federal trial court in May 2016 on behalf of City of Jacksonville, Florida. The litigation, and report, involve a 1943 disaffiliation of a gas corporation from its holding company, as mandated by the Public Utility Holding Company Act of 1935. The report explains why the disaffiliation did not prevent liability for the costs of environmental cleanup, if such liability exists under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, from passing to the new corporation.

Books by Hempling

Regulating Public Utility Performance

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

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Preside or Lead

Preside or Lead?
The Attributes and Actions of Effective Regulators

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Hempling Appearances

Energy Bar Association
Panel on Practice Principles for New Regulatory Lawyers


UDC Law School Panel
Is the Exelon Takeover of Pepco in the Public Interest?


Nigeria Electricity Regulatory Commission
3rd Judges’ Seminar


Telecom Forum
Asamblea Plenaria REGULATEL


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I highly recommend Scott Hempling. I have known him since 2003, since he was a consultant for the Hawaii Public Utilities Commission on various important and cutting-edge policy regulatory matters in Hawaii, through his time as the Executive Director at the National Regulatory Research Institute. His expertise, knowledge, and experience in all regulatory and energy matters is unmatched, and he would be a highly valuable resource and asset in any such endeavor.
— Carlito P. Caliboso, former Chairman, Hawaii Public Utilities Commission