Last week, outgoing FERC Commissioner Tony Clark said there is a "need to insulate state utility regulators from political pressure."
I agree.
But what's really interesting is that Clark actually said those words out loud. If you were to ask any state regulatory commission whether their decisions were politically influenced, you'd most likely get a denial.
But how could their decisions NOT be politically influenced, when the Commissioners themselves are political appointees? In the majority of states, regulatory commissioners are appointed by the Governor, or "elected" by the state's legislature. In twelve states, regulatory commissioners are elected by the voters in a general election. In all instances, politics loom large in a Commissioner stepping into the job, and, more importantly, keeping that job for additional terms.
In West Virginia, appointments to the Public Service Commission are treated like political favors, and the Governor has been known to let Commissioners continue to sit for years after their appointment expires, without naming a successor. In that instance, the Commissioner's day-to-day employment is subject to the whims of the Governor, who can appoint a successor at any time the sitting Commissioner displeases him.
Political influence over commission decisions is the norm, and utilities have become expert at shaping and using that political influence to get their projects approved. Utilities spend big bucks to shape political dialogue, and buy the support of the right political influences, to smooth project approvals.
Baldly stated, a utility commission currently makes its decision to approve or deny a project based on politics. It then picks and chooses evidence from the record that best supports its decision. This is a complete reversal of how it's supposed to work: The Commission should examine and weigh evidence to reach an impartial decision based on facts. The evidentiary record is supposed to shape the decision, not the other way around.
I'm not sure that Clark provided a suggestion on how to reform state commissions to foster independence, but he had plenty to say about why our current model isn't working.
I agree.
But what's really interesting is that Clark actually said those words out loud. If you were to ask any state regulatory commission whether their decisions were politically influenced, you'd most likely get a denial.
But how could their decisions NOT be politically influenced, when the Commissioners themselves are political appointees? In the majority of states, regulatory commissioners are appointed by the Governor, or "elected" by the state's legislature. In twelve states, regulatory commissioners are elected by the voters in a general election. In all instances, politics loom large in a Commissioner stepping into the job, and, more importantly, keeping that job for additional terms.
In West Virginia, appointments to the Public Service Commission are treated like political favors, and the Governor has been known to let Commissioners continue to sit for years after their appointment expires, without naming a successor. In that instance, the Commissioner's day-to-day employment is subject to the whims of the Governor, who can appoint a successor at any time the sitting Commissioner displeases him.
Political influence over commission decisions is the norm, and utilities have become expert at shaping and using that political influence to get their projects approved. Utilities spend big bucks to shape political dialogue, and buy the support of the right political influences, to smooth project approvals.
Baldly stated, a utility commission currently makes its decision to approve or deny a project based on politics. It then picks and chooses evidence from the record that best supports its decision. This is a complete reversal of how it's supposed to work: The Commission should examine and weigh evidence to reach an impartial decision based on facts. The evidentiary record is supposed to shape the decision, not the other way around.
I'm not sure that Clark provided a suggestion on how to reform state commissions to foster independence, but he had plenty to say about why our current model isn't working.
Another challenge facing the industry is the need to insulate state utility regulators from political pressure.
In instances around the country, he said, "you're seeing the confluence of politics challenging that independent regulatory model."
It's a reason the California Public Utilities Commission was located in San Francisco instead of Sacramento back in the 1800s when it was the California Railroad Commission, to protect regulators from the political influence of the powerful monopoly railroads.
Clark cited the Nevada Public Utilities Commission decision late last year in which regulators posted fixed charges for NV Energy customers with solar energy systems and slashed rates for compensation for excess energy put back on the grid (ClimateWire, Jan. 11).
He quoted a solar industry executive who told reporters that Republican Gov. Brian Sandoval should "get control of his appointees."
The comment, Clark said, "drives home that large segments of the public -- and sometimes fairly sophisticated people that operate in this space -- view regulatory commissions as just another extension of politics."
But at least he's acknowledged the elephant in the room.
How do we assure that political appointees (or elected officials) are actually able to act independently once they assume their seats? Limit them to one term, so that future appointments or elections become irrelevant? If commissioners were limited to one term, would quality regulators even show an interest in the positions? What are other possible solutions?
How do we assure that political appointees (or elected officials) are actually able to act independently once they assume their seats? Limit them to one term, so that future appointments or elections become irrelevant? If commissioners were limited to one term, would quality regulators even show an interest in the positions? What are other possible solutions?
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