Adapting Regulation to Market Realities

Abstract

Issues and debate around the responsibilities of electric utilities often arise when some external event calls into question the legitimacy of utilities having franchise rights in their respective jurisdictions and being the “provider of last resort” (POLR). Provider of last resort designation requires the provider to provide default or back‐up electricity service in the event the primary supplier is unable to fulfill its obligations. Whether it be catastrophic storms causing widespread service outages, wildfires, or negligence in the industry's supply chain causing shortages of materials and supplies or of the energy itself, regulators, policy makers, and customers question the role and responsibilities of their local utility provider. Such issues also arise organically as the industry changes and evolves, supported in part by changes in regulatory and public policy and the widespread penetration of emerging technologies, enabling customers to generate their own electricity. As competition to utility service provision grows from technology providers and energy service companies selling directly to customers, regulators are rethinking the obligation of franchise utilities as the POLR.