Agency transformation and state public utility commissions

Abstract

The demise of public utility commissions has been periodically predicted (sometimes hoped for). In their long history they have been attacked by critics as ineffective, inefficient, expensive, or unnecessary. Further, the demonstrated survivability of the commission concept has often been uncharitably attributed to powerful political constituencies, self-preservation maneuverings by commissioners themselves, and inertia. The implications of this article point another way. Commission regulation of public utilities has survived mainly because of continued need for social oversight of these critical industry sectors and the capacity of PUCs strategically to adapt to fundamental changes in their surroundings. Two transformational upheavals are treated here – a challenge of flexibility and responsiveness by the dramatic run-up in costs and prices in the 1970s and challenge to relevance by the policy shift to greater reliance on market competition in the 1990s – and regulation's successful accommodation to them. Viewed this way commission regulation is more in a position of “second wind” than “last breath.”