Question: What is your relationship with the state legislature? Do lawmakers in your state show interest in utility regulation? Should PUCs work more closely with state legislatures?Response by...
Will the Sun Set on PUCs?
WHEN 42 PUBLIC UTILITY COMMISSIONERS HUDDLED in private recently at the Brown Palace Hotel in Denver to discuss their roles come 2003, they came to a striking conclusion: Someday they might be out of business. Some said it would take five years, others said as long as 10.
"There was quite a bit of discussion and interest in commissions actually formulating what they call an 'exit plan,' by which they meant, in a kind of systematic way ... being prepared to wind back on their regulatory oversight," says Douglas N. Jones, director of the National Regulatory Research Institute, co-sponsor of the Commissioners Summit. "I'd not heard that before. And I've been in [regulation] 38 years."
"I think it is a reasonable goal to work ourselves out of a job, over some period," agrees R. Brent Alderfer of the Colorado Public Utilities Commission, a summit attendee. "We're now the B-52 of utility regulation ... it's time to trade it in for the B-1, or something a little more flexible."
The conclusions of members from 28 commissions, reported by a half-dozen attendees interviewed after the gathering, were a fitting adjunct to an NRRI report that served as the summit primer. Called Organizational Transformation: Ensuring the Relevance of Public Utility Commissions, the white paper captures conclusions of a similar 1995 get-together, also sponsored by NRRI and the National Association of Regulatory Utility Commissioners.
The report confirms that commissions must change their culture, staffing and skills to ready for deregulated utility markets. They must prepare for a world where there are no more rate cases. Commissions must transform the public into educated consumers while also assessing their own performance as public bodies.
Examing Skills and Culture
Other findings of the report and the "commissioners only" summit reveal that PUCs will have to:
Face down civil service restrictions while restructuring staff to handle market demands. Commissioners have found they need more economists and marketers and fewer attorneys. But it's tough to replace staff when an estimated 75 percent of a 11,116 combined state commission workforce are civil servants. As the NRRI report notes, decades-old staff attitudes must be overcome to "smooth the path from a placid tribal existence to one of flux and healthy turmoil." Commissioners will have to lead the "tribe" while maintaining morale, which generally isn't good.
Develop "guest relations" attitudes. Borrowing a term from the hotel industry, commissions, in developing new consumer roles of education, must treat ratepayers as cherished customers. As they do this, commissions will need to avoid turf struggles with other consumer agencies. Commissioners will need to reach out more to legislators and the press. They'll need to deal with sister agencies in state government, such as economic development and tax departments. This communication will be especially vital as legislators envision commissions "replaced" by competition and as PUC budgets become targets.
Encourage cooperation between states. Commissioners at the summit, however, stopped short of ceding to regional regulation.
Take on new functions, such as alternative dispute resolution. Commissions will have to meet more frequently with utilities to resolve issues before those issues