Appointed PRC would better serve consumers
Voters in November will decide whether to change the Public Regulation Commission from an elected, five-member commission to an appointed three-member commission. Voting in the affirmative would also create a nominating committee charged with compiling a list of candidates submitted to the governor who would then appoint members from the list, with the consent of the state Senate, to serve on the PRC.
Citizens in only 11 states elect their utility commissioners. The elected system in New Mexico has been in place since 1996 when voters approved a constitutional amendment to create the PRC as a five-member commission, with members elected from districts.
The amendment on the ballot in November received bipartisan support in both chambers. The governor also supports it.
Voters should ask themselves three basic questions:
How does the selection method of PRC members affect the chances that commissioners will act out of self-interest and other reasons external to the public interest?
What incentives do commissioners face under each selection method?
What qualifications do commissioners have to make good decisions on highly technical issues?
Each selection method is susceptible to regulatory capture, jeopardizing the mission of a commission to serve the public good. The results of elections might better reflect the preferences of special interests than of the general public. Governors’ appointments might hinge on the pressures exerted by special interests for favors in return for political support. From this perspective, we cannot say with certitude that one selection method is superior to the other.
Like their colleagues in other states, the PRC has an obligation to ensure (1) the availability and reliability of utility services, and (2) that the rates and conditions for those services are fair, just and reasonable for all utility customers. The ultimate question then is whether an appointed or elected commission would better advance those goals.
In a recent policy brief written for the Rio Grande Foundation, I concluded that a three-member PRC appointed by the governor, with input from the nominating committee, would be best for New Mexico.
First, the nominating committee — assuming it functions like it should — should screen out bad candidates and submit only qualified candidates to the governor.
Second, sadly for New Mexicans, too often in the past, elected PRC commissioners were unqualified and ill-suited for the job. The public should expect that an appointed PRC would be less political and better able to comprehend the issues brought before it in terms of the public good. The sorry history of an elected commission in New Mexico perhaps makes the most compelling case for an appointed PRC.
Third, an elected regime precludes many qualified people with the right skills, temperament and expertise, because they lack political connections or the willingness to run a political campaign. We should then expect a smaller pool of qualified people to run for office than the pool available to the governor.
Fourth, having worked for state utility commissions around the country for more than 28 years, I have observed that, generally, appointed commissioners are more competent, professional and knowledgeable. Elected commissions tend to attract and reward politically savvy people with little expertise in public utility matters.
Lastly, from talking with several people who worked for and interacted with the PRC, its predecessor, the appointed Public Utility Commission, was better respected, more engaged in understanding the issues brought before it and, overall, operated more effectively. There also has been widespread criticism of the elected commissioners’ qualifications to make decisions on highly arcane and technical issues.
The perception of many observers is that the elected PRC has ill-served the state for almost 25 years. In November, New Mexicans should vote to end this failed experiment by approving Constitutional Amendment 1 to establish an appointed three-member PRC.
Kenneth W. Costello is an adjunct scholar with the Rio Grande Foundation. He is a regulatory economist and independent consultant, residing in Santa Fe, who previously worked for the National Regulatory Research Institute, the Illinois Commerce Commission and Argonne National Laboratory.