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Defining the New Policy Conflicts

Failing to address and adapt to the new ratemaking realities could result in increased costs for the economy.

Fortnightly Magazine - July 2006

these issues included FERC Commissioner Nora Brownell, Gulf Power President and CEO Susan Story, Irene Flannery of the Universal Service Administrative Co., former NARUC President Robert Rowe, Professor John Mayo of Georgetown University, Bob Gee of The Gee Strategies Group LLC, Allan Guyet of the Florida Department of Environmental Protection, Donald Santa Jr. of the Interstate Natural Gas Association of America, and J. Alan Beamon of the U.S. Department of Energy. Speaker presentations can be found at http://www.purc.ufl.edu. PURC is a research center at the University of Florida dedicated to providing policymakers, service providers, and stakeholders with the information and tools that they need to enhance the efficiency and effectiveness of utility services. PURC’s annual conference brings together prominent researchers and practitioners to engage in a dialogue on current utility policy issues confronting Florida and the nation.

2. Lord, William B. (1979). “Conflict in Federal Water Resource Planning” Water Resources Bulletin 15(5): 1226-1235; and Shabman, Leonard (2005). “Water Supply Conflict and Government Response: The Challenge for Florida,” Askew Institute Report Spring: 10-11.

3. Heifetz, Ronald A., and Marty Linsky. (2002). Leadership on the Line: Staying Alive Through the Dangers of Leading, Boston, MA: Harvard Business School Press, p. 12.

4. In certain situations stakeholders may be able to engage in transactions, such as logrolling, to mollify authority and value conflicts. However, such transactional approaches to resolving adaptive challenges only delay the adaptive work because shifts in the external environment will always disrupt the agreements.

5. The amount by which a company’s costs must exceed the national average vary with company size, such that smaller companies receive more financial support than do larger companies. Furthermore, the amount of support depends on the extent to which the company’s costs exceed the national average.

6. Irene Flannery, “USAC and the USF: Helping Keep Americans Connected,” presentation at the PURC Annual Conference, February 2006.

7. Richard Gabel, Development of Separations Principles in the Telephone Industry, East Lansing, MI: Institute of Public Utilities, 1967, at 116.

8. Irene Flannery, February 2006.

9. John W. Mayo, “Reforming Universal Service,” Presentation at the PURC Annual Conference, February 2006.

10. Access charges are the interconnection payments that long-distance providers pay to local telephone companies.

11. Robert Rowe, “Federal Universal Service,” Presentation at the PURC Annual Conference, February 2006.

12. Robert Rowe, February 2006.

13. Federal Communications Commission, 2005a. Universal Service Monitoring Report, CC Docket 98-202, 2005, Table 1.12.

14. The ratio of participating households to eligible households is one- third. However, in California, which accounts for approximately one-half of all Lifeline participating households, 36 percent more households participate in the program than are eligible. See Lynne Holt and Mark A. Jamison, “Making Telephone Service Affordable for Low- Income Households: An Analysis of Lifeline and Link-Up Telephone Programs in Florida,” PURC working paper, University of Florida, 2006.

15. Lynne Holt and Mark A. Jamison, 2006.

16. Lynne Holt and Mark A. Jamison, 2006.

17. J. Alan Beamon, “Driving Forces Behind Generation Fuel Mix in the Annual Energy Outlook 2006,” Presentation at the PURC Annual Conference, February 2006.

18. Donald F.