[BETA] Fortnightly

Politics at the PUC benefits no one, says a consultant, while another reader reminds that there's more to renewables risk than fuel price.

I find refreshing Commissioner Craig A. Glazer's admission that what is happening to electric and gas utilities is restructuring, not deregulation ("Ten Ways to Annoy a Regulator,", Feb. 15, p. 26). However, readers know that. The general public is being misled into thinking that deregulation is occurring, so Commissioner Glazer is addressing the wrong audience.

Having long observed and participated in the utility regulatory process, I find Commissioner Glazer's theme interesting and some of his "mistakes" deserving of comment. It is unfortunate that the politics of regulation usually causes "annoying a regulator" to be a career-limiting action. I have observed regulators who deserve to be so thoroughly "annoyed" they seek another line of work.

Some of Commissioner Glazer's "mistakes" require mutual trust, so cannot be implemented without the regulator demonstrating trustworthiness. Too often, mutual trust is not possible, because the regulator is using his or her current position as a political stepping stone.

The politics of regulation often precludes the kinds of communications Commissioner Glazer suggests are needed for regulation to be effective. Some regulators are even precluded from communicating with their own staffs. That is particularly unfortunate, because it is impossible for a regulator to be any better than his or her staff. Even a well-qualified and highly competent staff can react to the politics of regulation by resorting to telling commissioners what the staff thinks they want to hear, instead of telling commissioners what they should hear. I have observed staffs become politicized, and I have yet to observe a commission recovering from this situation.

Commissioner Glazer observes that it is natural for utilities and intervenors to want to do an end-run around the commission by contacting the governor. It is unclear whether he is suggesting that intervenors also avoid doing such an end-run, but I hope he is not, because not doing so is likely to be detrimental to the state economy.

Intervenors should be encouraged to contact the governor, as the governor is likely to better understand and be more willing to respond to demonstrations of the adverse impact of regulation. However, intervenors need to be active participants in regulatory proceedings to ensure that regulators have the factual basis for decisions that are not detrimental. Industrial intervenors are particularly adept at minimizing the detrimental effects of the politics of regulation on their operations, because they have both the wherewithal to understand what is happening and the ability to react by shifting operations elsewhere. This understanding and ability also assures that such intervenors will benefit the most from restructuring.

John S. Ferguson
Principal
Ferguson Associates
Richardson, Texas

This is a quick note to let Mr. Art Holland know that I have just read his paper titled "Did Power Plant Buyers Pay Too Much?" (, Nov. 1, 1999, p. 26) this morning and was extremely impressed with the depth and sophistication of his technical analysis. Right on!

It is amazing to see that so many deals, particularly