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PUCs at 2000 - Question TwoState Commissioners

Fortnightly Magazine - November 15 1995

as an agency, has successfully communicated with bill sponsors and others to develop a fuller understanding of the complex issues.

Lawmakers in Colorado have strong interest in utility regulation. For matters of major policy and development of proper authorities, the legislature plays a key role in providing guidance to the PUC. At the same time, the PUC acts as a resource to the legislature in providing expert opinion on matters of significant regulatory policy and administrative efficiency. I believe that PUCs should work more closely with their legislatures to build confidence in the laws and system designed to bring benefits to the consumers of utility services. [End of Hix response]

Response by Reginald J. Smith, Chairman, Connecticut Department Public Utility Control:

The regulatory framework envisioned by most legislators today will be radically different from that currently employed by most states. With rare exception, virtually all state legislative initiatives with which I am familiar seek to severely proscribe the powers of the regulatory community and substantially reduce its contributory role to that of a market arbiter and a steward over any common resources critical to the success of participants in any relevant utility market.

The problem I see in such an approach is that the self-interest of the few (i.e., industry) may be overshadowing the interests of the many (i.e., the public). The banner of competition so quickly waved by the industry is too often the "end" objective and not merely the means to a greater end - a marketplace in which greater choice between products, prices, and providers of utility services is available to all members of a community.

In my view, it is imperative to question seriously any further erosion of regulatory participation in the future of the utilities markets. Regulators can play a valuable role in deliberating and deciding public policies for the utilities industry. To that end, regulators today must confront the legislators of their states to assist them with their greater responsibility to the public that elected them. Regulators offer legislative colleagues:

* an independent body of subject matter experts available to analyze and assess various alternatives under consideration by the legislature

* an effective counterbalance to any unified effort by industry sponsors to introduce discriminatory or self-serving initiatives

* a source of alternative and even independent legislative proposals that offer greater public benefit than those under consideration.

In each instance, the regulatory community represents resources not otherwise available to the legislatures. Ignoring the availability of those resources, by intent or by disinterest, denies the general public adequate representation, and the legislature the opportunity to fully and fairly consider all of the implications of legislative change.

My views in this area have been, in part, influenced by the DPUC's ongoing interaction with the Connecticut legislature, interaction that plays an integral role in shaping the state's regulatory framework and markets for the future.

In 1993, the legislature empowered a task force, in which the DPUC actively participated, to recommend how Connecticut could best deal with competitive trends in the telecommunications industry. The legislation that resulted from the task force's