Public Utilities Reports

PUR Guide 2012 Fully Updated Version

Available NOW!
PUR Guide

This comprehensive self-study certification course is designed to teach the novice or pro everything they need to understand and succeed in every phase of the public utilities business.

Order Now

Will the Sun Set on PUCs?

Fortnightly Magazine - July 15 1998

with us to try to get an independent evaluation -- someone who hadn't litigated the case. ... The commission did not adopt the staff position. But some of the parties felt when the order was written ... it was not as well balanced as it should have been."

Under ex parte rules in Kansas, technical staff aren't prevented from open discussion with the commission; legal staff is. Now, to avoid these problems, a small staff of attorneys advise the commission only, and there's no worry of dual commission-advocacy roles.

Alderfer, of the Colorado PUC, says his 90-employee commission, all civil servants, has been wrestling with how to free up time from adjudicatory and rate-making cases. These cases could easily take all the staff's time, but the commission needs to look at setting policies in the electric and telecommunications markets.

The Colorado PUC has an ongoing task force that will look for ways to shift to an effective policymaking model.

For employees, Alderfer admits "healthy turmoil is uncomfortable for folks who have done the job effectively for a long time one way."

"In preparation of a case, in the thinking and in the options presented to the commissioners, the staff needs to address a new range of options, so it needs to begin the thinking of what kind of public interest considerations are there if the utility can set its prices wherever it wants within a band," he says. "It takes a new kind of thinking, rather than, 'Let's give them a 9 percent rate of return.'"

Defining a Market Rate

James J. Malachowski of the Rhode Island Public Utilities Commission, who also was at the summit, says his small commission of 11 employees is making changes slowly. It does so through attrition and through adjustments to market factors.

"The new entrants are being regulated entirely differently," he says. "We've attempted to keep the hurdle for entry very low. We ask them to file a statement of business operations just basically so we know who they are and where to get a hold of them...and what kind of business line they're in. Yes, we look at whether they're capitalized, but it's not a type of extensive review that has taken place in the past."

The commission doesn't require financial reports, does not look at profit levels, and it sets no price caps or other regulatory schemes.

Only when there's a complaint does the Rhode Island commission examine quality-of-service issues. Incumbents file extensive monthly quality-of-service reports, something other commissioners and Jones says is a trend: more attention will be paid to service quality and less to financial issues as markets deregulate. Why? There will be more opportunities for companies to abuse service quality issues.

Malachowski says three areas where the changing commission mission is affecting expertise in staffing is in arbitrating competitor differences, in consumer education, and in how commissioners look at markets.

On the second point, he notes, "I have good accountants here. Do they really know anything about marketing? Do they know anything about sophisticated consumer preference tools? Surveys? Focus groups? If