Energy Policy & Legislation

The three mortal sins of utility regulation are ideology, ignorance and inertia (the three I's). Acting on political beliefs, inadequate information, and past conditions that no longer exist is a recipe for poor regulation.

We're enamored of free markets, particularly in the nineties. But power markets cannot come close to emulating authentic competition. Why? They cannot satisfy the basic conditions of competition taught in microeconomics 101.

Debates over utility business and regulatory models have sidestepped a fundamental question: What do state legislators and regulators want the electricity utility of the future to do? Do they want "fat" utilities that play a larger role in implementing public policy and delivering energy services to customers? Or "skinny" utilities that are more narrowly focused on the ownership and upkeep of the grid?

I do not understand why we are still distracted by Net Energy Metering (NEM). It worked well when we had not-so-smart meters and were trying to encourage rooftop solar penetration. People in general and students of regulation in particular are left confused and can easily find some support for both sides. This results in conflicts and proposed compromises that keep the debate going at full tilt. Two things are missing or mostly overlooked in all this regulatory discourse.

We continue to rush towards a renewable future without considering overall system design, the costs that various renewable scenarios impose on grid operation, and the operation of the grid with these scenarios. When the externalities of climate change and ocean acidification create an overwhelming mandate to move away from fossil fuels, we have no choice but to go forward. Shouldn't we try to pick the cheapest path?

Commissioner Powelson was installed as the 128th president of NARUC in November 2016.

Adam Smith's first book, “The Theory of Moral Sentiments,” argued that people acted not just for money, but also out of professional pride, fairness, patriotism, altruism and other non-economic reasons. Maybe the time has come to revisit Adam Smith and his important first book.

Offer end uses as the product, and not therms or watts. The utility becomes a true energy service company.