Due to troubles at the Kewaunee nuclear power plant, the Wisconsin Public Service Commission has agreed to allow its three utility owners to accelerate depreciation based on a plant retirement in...
Utilities and Regulators: A Search for Harmony
Ratemaking Special Report: Survey respondents weigh in with needed actions.
- "The commissions and their staffs need to approach each utility proposal with an open mind and then weigh the pros and cons." (Utility)
- On the principle of independence:
- Commissions must be leaders in educating the public and not just critics of legitimate participants in the service process." (Utility)
- "Regulators could decide to place less importance on political influence and stop using the job as a 'bully pulpit.'" (Regulator)
- On the principle of communication:
- "Better and on-time communication. Finding about all costs before we rule." (Regulator)
- "The commission tends to 'speak through its orders' rather than more effectively communicating and informing non-regulated stakeholders (, the public)." (Regulator)
- On the principle of effectiveness and efficiency:
- "Commission takes a traditional view of data collection, somewhat reluctant to use non-traditional performance measures (, quantitative and qualitative research) for stakeholders and the commission." (Regulator)
Building Trust Among Stakeholders
The building of trust between the utility and the regulator greatly can enhance the effectiveness and efficiency of the regulatory process. With this premise, we asked survey respondents about the strength of their opinions as to the actions a utility and regulator each could take to build the greatest amount of trust between them. Table 4 shows how each group weighted these actions, with some carrying equal weight within each respondent group.
While ranking the effectiveness of these actions, survey respondents remained cognizant of the nature and the prospect for success in implementing such actions, commenting, "You can never 'fully disclose' to another party's complete satisfaction"; "[Parties should] not be bound by traditional thinking, or by an 'us/them' mentality"; "Better dialogue consistent with rigorous and ethical standards"; "Focus on goals, performance rather than micro-managing the process."
Enhancing the Rate-Case Process
Based on recent rate-case experience, survey respondents identified actions that would make the rate-case process less adversarial and controversial, but more predictable and effective. Comments from utilities and regulators reflect a mutual awareness, and in some cases, agreement as to the positive steps that each party can bring to the regulatory process. A sampling follows.
- "Pre-warn key players of the filing, the objectives, and the impact (, treat effected parties with respect)." (Utility)
- "Provide continuing education so the regulator is informed on the issues prior to seeing them in a rate case." (Utility)
- "Each [should] 'walk in the other's moccasins' when approaching a case (, what would I want to know if I were the regulator?)." (Regulator)
- "More open and ongoing dialogue between the utility, other shareholders, and commissioners." (Regulator)
- "Better understanding and comprehension by commission as to what its decisions can do to the utility's financial health and its credit ratings." (Utility)
- "An acknowledgement by stakeholders that utility requests for rate relief are not automatically assumed to be unnecessary or unreasonable." (Utility)
- "More consumer education and outreach by the utility and by the commission." (Regulator)
- "More transparency (regulator should express concerns before deciding)." (Utility)
- "Consistent positions by commissions regarding similar issues between different utilities and from one rate case to the next for the same utility." (Utility)
- "Commission should stay consistent