State PUCs take aim at unscrupulous electric and gas suppliers.
Phillip Cross is legal editor, Public Utilities Fortnightly, and serves on the editorial staff of Utility Regulatory News, published by Public Utilities Reports, Inc. (our publisher), which reports weekly on ratemaking and regulatory decisions issued by state public utility commissions.
The last two decades have seen state public utility commissions (PUCs) conducting an experiment in real time over the ins and outs of electric utility restructuring and retail choice. And as with any experiment, it began without any clear sense of where it might end.
If the goal be a fully functioning competitive market, then theory might say that traditional price regulation should give way to a less intrusive and presumably more efficient role for state PUCs - to do no more than preserve a level playing field for the market to work its magic. But if the real world is any guide, it appears we have some way to go to reach that goal. For evidence of that, see the article in last month's issue, written by Terry Fitzpatrick, a former PUC Chairman, on how that idea has played out in Pennsylvania, a leading state among advocates for retail consumer choice in electricity.
But on the other hand, if the end result should demand fairness and equity, then regulators might well become market policemen - acting much like courts to win redress for consumers against unscrupulous marketing and billing practices. And in fact this scenario seems to have been the more common in recent years, as will be shown by a series of state PUC decisions handed down over the past year.