Failing to address and adapt to the new ratemaking realities could result in increased costs for the economy.
Mark Jamison is director and Paul Sotkiewicz is director, energy studies, at the Public Utility Research Center (PURC) at the University of Florida. Contact Jamison at mark.jamison@cba.ufl.edu.
Precisely because change is constant, the foundations have to be extra strong.—Peter F. Drucker
The approaching 100th anniversary of regulation by public utility commissions in the United States calls for some reflection. Which ideas are our true foundations and which need to adapt to new realities?
Are telephone subsidies a foundational principle, or do new realities in competitive telecommunications force us either to give up traditional pricing and subsidies or face the prospect of some services and service providers disappearing? Are new energy and environmental policy realities, changing world energy markets, and growing demand challenging consumers to adapt to higher prices and price volatility; challenging producers to make long-term construction plans without the benefit of long-term policy stability; and challenging environmentalists to reconsider their opposition to advanced coal and nuclear technologies to meet future demand? Failing to address and adapt to new realities likely will result in increased costs for the economy.