Governance models of public utility commissions in the United States

Abstract

Regulation of utilities at the state level in the United States is undertaken by a commission on which anywhere from three to seven commissioners sit and must vote on virtually all significant utility actions, including rate requests, resource plans, acquisitions and mergers, and financing mechanisms. Public utility commissions (PUCs) are, in a very real sense, courts with adjudicatory responsibility over the area of state utility laws. In hearing a utility case, they must follow the state’s statutes and court rules. The commissioners function as judges in this court of public utility law. In a majority of states, commissioners are appointed by the state’s governor with the advice and consent of the state legislature. In a significant minority of states, commissioners are elected by popular vote. However, recent changes in US election law have made it easier for corporations and special interest groups, called political action committees, to influence elections through donations targeting direct voter outreach on behalf of specific candidates. This chapter examines what the entry of political spending in PUC elections means, and whether elected commissioners can adjudicate in the public interest, or will adjudicate for special interests. The chapter concludes that while both the appointment and election governance model can produce both “good” and “bad” commissioners, it is the elected commission that is most at risk of selecting commissioners that will not be truly independent and objective arbiters of the law.