I ❤ Regulation


It's Timely to Remind Ourselves Why

Fortnightly Magazine - February 2022

PUF's annual "Future of Utility Regulation" Luncheon is almost upon us. Each year the Luncheon takes place on the first day of NARUC's Winter Policy Summit. Except when a pandemic — pre-vaccination — precludes it as happened last year. 

The NARUC Winter Summit's first day has typically been on or proximate to Thomas Edison's birthday. That's the eleventh of February of course. 

Think back to February of 2020. Recall those precious last moments right before the pandemic wiped out life on earth as we knew it? 

The first day of NARUC's Winter Summit that last semi-sane year was the tenth of February. So, we really should have commemorated Edith Clarke's birthday with those luscious Luncheon cupcakes, rather than or in addition to Edison's birthday. Because Clarke was born on the tenth of February, and was the genius who made long-distance electric transmission possible, and hence North America's electrification. If you read my book (surely you have), "Women Leading Utilities, the Pioneers and the Path to Today and Tomorrow," you already know this. 

The 2022 calendar has thrown us for a loop, however. This year, the first day of NARUC's Winter Summit is the fourteenth of February. Hence, the "Future of Utility Regulation" Luncheon falls on Valentine's Day.

Which frankly puts us into a romantic mood. True, it might occur to some that attending the NARUC Winter Summit and PUF Luncheon on the very day when most express their affection for that special someone is, well, odd. Yet, for many of us, spending the day in this most peculiar way — paraphrasing David Bowie — seems quite fitting. 

That's why the Luncheon cupcakes this time around will not commemorate Edison's birthday nor that of Clarke. It will instead evince our love for, quite naturally, regulation.

It could be said admittedly that we love regulation simply because all of you dear readers, and the PUF team too, certainly, are in the business of utility regulation. And related to that, utility policy and strategy. But such a statement would belie the passion you and we have for the utility industry in the service of the public.

The PUF team hears this all the time, whether we're talking with folks at utilities, utility commissions, associations of one or the other or both, vendors, and professional firms. Utility service in the public interest is a special calling that brings out the best in people and drives us to extraordinary dedication. This is especially the case when we're under the pressure of a major storm restoration or a decisive high-stakes policy debate.

It's timely at the beginning of a new year to reflect upon why we love regulation. And part and parcel to our love of regulation, why regulation so powerfully promotes the public interest. 

Regulation of the few industries most crucially important to the public such as railroads and meat packing came into being in the late nineteenth century and early twentieth century in capitalist countries, including the U.S. The electric, natural gas, and water utility industries were some of the first chosen for economic regulation. 

This change did many things to the evolution of these industries. But paramount among these, regulation effected a dramatic redirection of the corporate culture of the companies in these industries.

Through the twentieth century and now in the first quarter of the twenty-first, utility corporations have focused on public interests like safety, affordability, reliability, and sustainability as much as they have focused on their own financial good. Those utilities that do not, inevitably suffer financially either immediately or soon thereafter, under the constant and concerted gaze of regulation.

When politicians and the public complain about the practices of particular Internet giants, as they commonly do, I'm tempted to think, if only they were regulated like our utilities. Regulation would do the very same to those tech titans as they have done to our companies, tame their corporate cultures so that their own private financial good is not so overwhelmingly what drives them.

And I believe that is exactly why we love regulation. Unlike unregulated industries, our companies are remarkably oriented to serve the public good. 

They collaborate all the time across their industries to serve the public better this year than the last. They incessantly invest in listening to what the public and their many constituencies want. Which face it, are always so much, and so many times contradictory.

My forty-four-year career in the utility industries is apparently still going strong. Perhaps the most satisfaction has come from friendships with hundreds of totally awesome people at utilities and commissions and organizations about them. 

Why are you all totally awesome? In large part, it's because of your regulatory DNA. So regulation, Happy Valentine's Day!