Blog: General

November 2012

I recommend that writers and speakers in our industry be very careful with the term "incentives."  Strictly speaking, "incentives" comprise both the negative (fines and penalties) and the positive (rewards).  An "incentive" for the utility can be "Carry out a micro-grid policy or we will revoke your franchise to serve" (negative) or "If you would please implement our micro-grid policy, we will give you a 100-basis-point increase in your return on equity."

October 2012

Week 3 of the course I am currently teaching, Monopolies and the Nation's Infrastructure:  The Regulation of Public Utility Performance, addresses the process of converting historically monopolistic industries into competitive markets.  It's a subject prone to masking ideology or self-interest with imprecise language.  Exhibit A in the display of imprecision is the term "deregulation," a term used to describe anything from elimination of all regu

September 2012

My law students write short papers on the weekly readings for the course Monopolies and the Nation's Infrastructure:  The Regulation of Public Utility Performance.  Last week covered the legal changes necessary to convert a monopoly market into a competitive market.  (Changes include modifying franchise exclusivity, defining the type of regulation that new entrants "consent" to, establishing quality of service standards, defining the obligation to se

July 2012

June's storm-caused outages in the mid-Atlantic states produced calls for "undergrounding" of distribution lines.  Undergrounding is a possible, partial solution to outages, particularly where residents wish to retain their tree canopies.  But debates on undergrounding should probe at least two questions:

July 2012

A colleague in another field bemoaned her career’s uphill battle, trying to persuade with facts and logic when so many people base preferences on faith and ideology.  In regulation, we're lucky.  Since regulation is about performance, there's not much room for faith and ideology.  Potholes get filled, transmission lines strung, and cell towers built because of facts and logic.

June 2012

Relying on the "market" is not a belief system—promising positive results in proportion to hopes and prayers.  Relying on the market is a public policy decision, requiring (a) fact-based confidence that sellers' incentives are aligned with customers' needs, and (b) skepticism that the facts supporting that confidence today will necessarily exist tomorrow.