[From the Concord Monitor of April 20, 2009]Chelsea Conaboy's article about the work and mission of the Public Utilities Commission ("What's the role of the PUC?" Sunday Monitor front page, April 12) was so good that I handed it out to my energy regulation class at Vermont Law School. My students' reaction might be of interest to readers who care about energy policy.
With laudable accuracy and contextual sensitivity, Conaboy quoted me as expressing concern about the Legislature's unwillingness to delegate much policy discretion to the PUC. The next three people quoted in the article - a lawyer with energy clients, a former PUC chairman with business before the agency and the PUC's executive director - all disagreed, suggesting that the Legislature should make policy and the PUC should be deferential.
This made the cynics in my class chuckle. They noticed that the only person who was willing to say the PUC should have more energy policy authority and the Legislature should keep less of it was the guy who left his job as the PUC's general counsel and now ponders New Hampshire's energy issues from a safe distance in a neighboring state.
Still, the skeptics among your readers might conclude that this whole question of agency discretion is best left to policy wonks and law professors. The skeptics are wrong.
Electric mess
In 1996, the Legislature adopted the Electric Utility Restructuring Act. This could have been a one-paragraph statute instructing the PUC to find the best way to cause the state's electric utilities to divest their generation facilities and open their service territories to competition among energy suppliers.
Instead, the Legislature adopted nearly 2,000 words of instructions for the PUC, most of it under the heading of "interdependent policy principles." What result? The PUC gamely developed a restructuring plan as directed, issuing it on the specific deadline laid down by the Legislature, a Friday in February 1997. By the following Monday, the electric utilities had filed a federal lawsuit and obtained an injunction to block restructuring. The lawsuit took more than four years to untangle, and restructuring did not happen until May 2001.
Restructuring has failed. Only a few big industrial customers have opted for competitive suppliers. Residential customers have no choices available to them. No evidence suggests restructuring reduced rates. And, in response to the restructuring fiasco that triggered rolling blackouts and market manipulation in California, the Legislature intervened again with even more specific directives to the PUC, this time requiring PSNH to hold on to its non-nuclear generation facilities. This has left PSNH in a kind of restructuring limbo.
The PUC has more time, more energy expertise and more political independence than the Legislature. Would restructuring have played out differently, and more successfully, had the details been left to the agency? We'll never know.
Bow scrubber fight
Meanwhile, as Conaboy reported, the Legislature's tight reins led the PUC to conclude it lacked the authority to do anything when the price tag of PSNH's Merrimack Station scrubber project unexpectedly doubled to nearly a half billion dollars. The Legislature could have issued a general directive to the PUC to reduce mercury emissions at the coal plant in Bow.
Instead, lawmakers issued another long list of detailed findings and instructions.
The result: no debate before the PUC about whether the scrubber project is still the best way to reduce mercury emissions or whether coal power is a good future for New Hampshire in light of climate change. Instead, the New Hampshire Supreme Court will consider precisely how parsimonious the Legislature has been in delegating authority to the PUC.
After I laid out these views for my students, a particularly astute one asked a question. Would I be making this argument about the PUC's too-limited authority if I were still the general counsel of the PUC?
"Absolutely not," I replied candidly. Publicly criticizing the New Hampshire Legislature can only be practiced safely from outside the state.
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