Perspective

Hard-and-fast ring-fencing rules are not the best way to maintain order in the partially deregulated utility sector.

In 1992, my colleagues on the Michigan Public Service Commission (MPSC) and I initiated the first retail wheeling case in the country. Retail wheeling was the old name for competition, back when everyone thought that moving electrons from one place to another was a relatively simple task, one that could not in any way harbor underlying sinister acts or motives. Oh, how 12 years have changed those perceptions.

I left the MPSC within a year to go to Wall Street, joining the utility ratings group at Fitch Ratings. It took another 10 years to formalize retail competition within the state. Clearly, from the MPSC's view, that was a good thing. It allowed California to bear the brunt of the ills that often inflict a first mover on radical innovation. But what followed at Enron put the entire energy sector on edge and led to discussions about means to avoid those pitfalls in the future.