"It's going to take a lost of time to understand all the pies."
It's almost spring. There's a new energy secretary(emisn't there? And at least for new electric restructuring bills in...
Ratemaking Special Report: Survey respondents weigh in with needed actions.
over a period of time can lead to disagreements concerning approach or style, and result in differences of opinion that cloud the original intent of each group's worthy efforts. Recognizing the age-old adage, "actions speak louder than words," it is thought that much of the strained relations that exist today between utility leaders and regulators is the byproduct of misperceptions created by past actions or styles inconsistent with the original business and regulatory objectives stated by these groups.
One way to define the regulatory process is in terms of the various roles and responsibilities of utility regulators. We asked survey respondents to indicate their views as to the relative importance of these roles. The results, provided in Figure 2, underscore the different business and market outlooks taken by utilities and regulators on the utility distribution segment of the energy industry. These two groups find consensus in the fundamental roles and responsibilities of regulators-regulation of natural monopolies and advising the government-but there is little agreement when it comes to regulatory roles and responsibilities dealing with performance issues for both utilities and the markets in which they operate. Presumably, utilities believe that the establishment of quality and performance standards is less important as part of the regulatory process. Utilities claim they already embrace these standards by having to respond to customer needs, market pressures and competitive threats, and specific management initiatives. Many utilities also believe the market is self-policing and that if the "rules of the road" are properly set, regulatory monitoring of market behavior and performance is unnecessary. The survey results suggest that regulators believe the establishment of quality and performance standards, and the monitoring of market behavior, are both important aspects of their jobs, and that utilities cannot, or are not willing to, adopt these concepts without specific regulatory directives and oversight.
Survey participants also were asked to think about the "best practices" principles that can guide the specific activities of a particular regulatory body, and to indicate the relative degree of effectiveness of the regulatory body for which survey respondents worked, or under whose jurisdiction they operated ().
In summarizing these rankings, Table 3 contrasts the views between regulators and utility survey respondents in the five areas that the majority of regulator survey respondents saw themselves as "Most Effective/More Effective." We observed the greatest difference of opinion for the following three best practice principles: independence, predictability, and flexibility.
We also asked utility leaders and regulators to identify specific actions that could improve a regulatory body's overall effectiveness. Both groups provided many suggested actions, some of which are shown below.