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PUCs at 2000 - Question OneState Commissioners

Fortnightly Magazine - November 15 1995

Metrorail, universities, and hospitals. The actions of these entities, when faced with a choice of energy suppliers, could have a profound effect on the remaining customers of the incumbent electric utility. The focus shifts from a centralized least-cost plan to a cooperative, coordinated partnership among all levels of government, utilities, and business, with protection for residential consumers remaining firmly in place.

The PSC must ensure that the public interest aspects of utility service are not overlooked in the move toward the marketplace. Even with increased competition, the PSC must assure that quality of service is maintained, and that adequate, affordable service is provided to all customers. [End of Meyers response]

Response by Kenneth Gordon, Immediate Past Chairman, Massachusetts Department of Public Utilities:

Notwithstanding the wistfulness some of us (de)regulators feel when we recall the shutdown of the Civil Aeronautics Board, we are unlikely to emulate that step very soon in the network industries. Although significant deregulation will likely be desirable in certain aspects of the gas, electric, and especially telephone industries as competition unfolds, there will for some time be a need to regulate critical aspects of the process. First and foremost is interconnection terms and conditions for the retained monopoly elements of the network, whether they are pipes, wires, or loops. Additionally, some straightforward regulation, or perhaps a price cap, will likely be thought necessary for at least a while. Consequently, PUCs are likely to be around for awhile: to regulate and, hopefully, to structure changes as well.

Because the task is changing from one of regulating monopoly to encouraging more open, choice-based markets, new skills and different types of proceedings are needed - even as many and traditional tasks remain, whether by legitimate need or by legal requirement. In Massachusetts the formal structure has stayed in place, but the tasks and job assignments have shifted. In greater part this has meant additional work, but there also has been some substitution of new tasks for older ones. As the new issues predominate, structural changes in PUCs themselves will become essential in order simply to function. At a practical level such changes are likely to evolve out of necessity rather than a priori notions. The details of what needs to be regulated, and how, are emerging as this is written. In electricity,

generation may soon be workably competitive in so