EDITOR’S NOTE: This is first of a series of commentaries by Philip Jones, former Washington state regulator and influential past-president of the National Association of Regulatory Utility Commissioners. Next week: Lessons of a Regulator.
It has been both an honor and exciting to serve the public as a Commissioner from the Washington Utilities and Transportations Commission for the past 12 years. It has been the best job I ever had, and I came to the office every day not knowing the range of issues and challenges that would walk in the door.
Prior to accepting the appointment from Gov. Christine Gregoire and being confirmed by the state senate, I certainly did not understand the nuances and complexities of embedded cost-of-service regulation for regulated gas and electric companies. Or the complexities of communications regulations and what an “information service” as opposed to a Title II service, or the complexities of delivering 911 calls and building out Next-Generation 911 networks.
Or that water utilities are the most capital-intensive utilities in our country with significant needs for aging infrastructure upgrades. And then the issues of cybersecurity and physical security of our critical infrastructure industries operating in a digital age of Big Data and access to the Internet, whether it be electricity, gas, communications, or water. And finally, I did not understand how these vital critical infrastructure industries are increasingly interconnected with a need to take a more holistic approach.
PUC commissioners have perhaps the most difficult state government job today. Likewise, the Federal Energy Regulatory commissioners’ job has become more difficult and contentious although they don’t cover the range of critical infrastructure industries that PUC’s do.
Commissioners are decision-makers and cannot afford to sit idly while political discourse runs on without much consensus. Commissioners have so many conventional things to do where we have to perform the traditional balancing act of consumers and the investors’ need for an adequate return for utilities. Commissions will continue to set just and reasonable rates, with terms and conditions responsive to consumers, and enact rules that our legislature asks them to do.
Few people on the outside of the regulatory and political scrum in our state capitols really understand and appreciate what commissions do. But that is fine in some respects.
In fact, some commissioners prefer to operate below the political and media radar in their state or province, and focus on the quasi-judicial and quasi-legislative functions. One said when he took the job, he told his premier that his goal was to keep his name out of the newspaper or media during his 4-year term.
However, other commissioners prefer to operate more in the media spotlight, especially ones who are elected and not appointed, and believe strongly in the goal of engaging with consumers, the legislature, stakeholders, and the media.
There is no right answer here, and one has to look to one’s political culture in the state or province for the right context of this tightrope that each commissioner has to walk between keeping your head down and doing your job issuing precedent-setting orders, versus accommodating the various utility, stakeholder, vendor, and pressures from governors, premiers, and legislatures that are increasingly coming our way.
When an electricity or gas crisis hits the media, and either prices spike suddenly, or a shortage occurs or, God forbid, a sustained power outage what is called a black sky event, such as that we exercised in the Northwest during the Cascadia earthquake and tsunami exercise, the commissioners will be right in the thick of the fray.
We have the technical expertise with our staff that has accumulated over the years, we know the utilities’ grid and infrastructure better than anyone else in state government – so we will be called upon. Let’s just hope we are ready.