New Haven Register (New Haven, CT)
We can restore integrity in Conn. regulation
If you would be comfortable with having Connecticut’s Superior Court reporting to our attorney general or chief state’s attorney, you may be OK with having our utilities regulator report to the Department of Energy and Environmental Protection, as it does today.
Connecticut’s Public Utilities Regulatory Authority, or PURA, decides cases where DEEP is a party, but it is also a branch of DEEP. PURA reports to DEEP, which controls PURA’s budget, personnel decisions and organizational structure. Yet PURA is expected to be impartial and unbiased in cases involving DEEP.
Connecticut is unique in the country with this unusual structure. No other state requires its utility regulators to report to an agency that is a party before it for the obvious reason that regulators are to render fair and reasonable decisions based on facts and law and not be influenced by a party appearing before them.
Connecticut’s aberration began with the laudable effort to combine management of environmental and energy issues. It was a good combination, and the ensuing commissioners have been effective energy leaders.
Another necessary goal at the time was to reform the former Department of Public Utilities Control, reducing the number of commissioners to three and reducing its size.
Potentially negative consequences of having our regulators of electricity, natural gas and water report to the agency charged with setting environmental and energy policy have largely been avoided not because of the flawed structure but because of the integrity of the people involved. No system should have to cover a flawed structure by depending on leaders of consistently high ethical standards.
There have been challenges. In one instance DEEP called for delay in PURA rendering a decision, provoking outrage and withdrawal of the instruction. DEEP once sent to PURA explicit language to include in a docket decision. Fortunately, it was ignored. And political leaders have announced their views as to how rate cases should be decided before briefs were filed and hearings held. The political exhortations were not heeded.
Imagine the outrage if a party before a Connecticut court tried to instruct the court to delay a decision, ordered it to include specific language in a finding, or if a public official called for a guilty or not guilty determination before a trial began.
Connecticut has a strong record of regulatory integrity, but in recent years has shown that it is not immune to corruption. Better to correct an indefensible system than to rely on individuals not to abuse it.
The public usually ignores utility issues until service is unavailable or costs increase. Ensuring the safety and reliability of electricity, gas and water is a serious responsibility, its importance underscored by our history of floods, hurricanes and ice storms. Threats to water systems in Texas, Mississippi and Florida and national vulnerability to infrastructure shutdowns from cybercompromise all underscore the importance of utility reliability.
Utilities are monopolies requiring oversight, and electricity is expensive in Connecticut. Utilities have legal rights to recoup expenses incurred by used and useful provisions necessary to provide services and a constitutional right to earn a reasonable profit. Consumers obviously don’t want utility costs to rise, and elected officials enjoy denouncing requests for rate increases.
Utility commissioners need to understand financial, engineering, legal and public policy issues in deciding a rate case, a proposed merger or an alleged safety violation. They have to have backbone and strength to decide cases in a fair and reasonable manner based on facts and law, even when the outcome is not popular.
Utility commissioners in Connecticut should be able to do their work free from association with the policy preferences of those to whom they report and not face inherent conflict of interest. The General Assembly should repair the structure that exposes Connecticut to the appearance of undue influence in utility regulation and make PURA independent.
Absent legislative resolution, it is easy to imagine judicial branch remedy in the future. A party whose arguments differed from DEEP’s policy preferences could lose a case before PURA. Its attorneys could present the following to a court of law:
1. Is PURA’s duty to consider the facts and law in dockets before it, and to render a fair and reasonable decision devoid of any other considerations? Answer: Yes.
2. Does PURA report to DEEP, which also controls PURA’s structure, budget and personnel decisions? Answer: Yes.
3. Was PURA aware of DEEP’s policy preferences in this case before rendering its decision? Answer: Yes.
4. No further questions, Your Honor.
Arthur House was chairman of Connecticut’s Public Utilities Regulatory Authority from 2012 to 2016.