My business, the natural gas industry, stands at a crossroads. Unbundling and deregulation permeate the market. The next three years will see the end of many fixed, long-term supply and...
1996 Regulators' Forum
As electric restructuring rockets to the top of state public utility commission agendas, regulators find themselves pushed in every direction. Pushing the hardest, in most cases, are legislators, who, like commissioners, are being lobbied by utilities, industrial consumers, and sometimes, residential customers. Each party has its agenda. Some wield more clout than others.
Public Utilities Fortnightly asked eight commissioners about the demands of restructuring and about an issue particular to their state.
Comments by P. Gregory Conlon, president, California Public Utilities Commission:
Question: NARUC is restructuring. What must it maintain, what must it change, and what qualities must its director have to keep it ahead of industry issues?
Response: "I think their main goal is to make sure that we're focused in Washington, particularly on the Hill and at the two regulatory agencies that we're going through fundamental restructurings with the FCC on the Telecommunications Act and the FERC on electric restructuring. I think NARUC needs to take a leadership position in both of those efforts, and I think they have."
Question: How active is your state legislature in electric deregulation? When is this participation helpful? When is it intrusive?
Response: "We just went through legislation that passed both houses unanimously. And that was the most comprehensive piece of legislation that has gone through the California legislature, I think, in the last 20 or 30 years. . . . [There were] somewhere between 200 and 300 hours of hearings. During that process, I personally and some of my fellow commissioners were there to explain to them our policy decision. . . . And when the legislation was over with, they made some changes, but the basic principles weren't touched.
"Certainly the legislation did two things we could not do. Well, we could do it, but it fortified our ability to collect stranded assets by putting it in statute a surcharge. And it also enabled the municipal utilities to become members of the ISO, which we could never have forced because we have no jurisdiction. So I think those were the two principle things that were done that were very positive. They took a lot of decisions that were before us and made a decision for us that we would have normally done through our own process, so whether you call that intrusive. . . . We had a rate proceeding on Pacific Gas & Electric (PG&E) that was before us, and they decided it for us. They granted PG&E a 5-percent increase for the next two years. . . . It was a quid pro quo, for, in this case, PG&E not opposing the legislation. I mean there were over 100 parties involved in this process. So everybody got something; everybody gave something up."
Question: Did industrial and residential consumers pressure you to deregulate? How do the grassroots politics in your state differ from elsewhere; what defines your political climate?
Response: "What defines our whole exercise, our whole restructuring, is our high rates and the strong cry by the large users for customer choice. Those are the two driving forces. [Residential