Can Governors Help Make Regulation Effective?

In a state where rate levels have made headlines, a reporter asked me, "Since the commission is independent, what can the governor do?"  My answer was, "Plenty." 

The consumer's concern is not about rates, but about the monthly bill.  A governor can lead:

  1. by proposing legislation that empowers consumers to find ways to use less and to become less dependent on the utility; things like rate design, energy efficiency mandates, and renewable energy requirements, all of which involve short-term inconveniences but long-term savings;
  2. by opposing legislation that pressures the commission into committing to major power plants that could be avoided through conservation measures;
  3. by welcoming efforts by the FERC to make wholesale competitive markets work so that the state's utilities face discipline-by-comparison when proposing major expenditures;
  4. by proposing ways for the commission and the legislature to welcome diverse suppliers of efficient electricity sources, so that the public is less dependent on a single provider;
  5. by establishing  professional standards for the members and staff of the commission, and by funding sufficient staff resources and expertise, so that their education, experience, and stature equal that of the utilities they are supposed to regulate;
  6. by persuading the public that by making the right investments now, bills will go down in the future;
  7. by not making "lower rates" the immediate answer, because just as cutting education to save money means higher costs later (as workers are less productive and citizens less engaged), cutting rates now while avoiding the long-term reasons for high rates won't solve the problem either.

Real leadership is recognizing that solutions aren't simple and that it's worth the political risk to say so.

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