Thoughts on the advocacy of regulators

They all advocate – the real question is for whom?

WHAT SHOULD WE EXPECT from government regulators? Do we believe they can serve in an austere, removed fashion, eclipsing social context and eliminating personal bias through a mechanical reading of the law? Or do we understand regulatory action, at its core, and the regulatory platform, to be activity in service of the public interest, furthering the equitable treatment of residents, workers, customers, and industries?

A recent Commonwealth story drew a contrast between the Cannabis Control Commission (CCC) and the Massachusetts Department of Public Utilities (DPU)––a comparison that is in itself fascinating because of the vastly different history of the two agencies. The predecessor to the DPU, the Board of Gas Commissioners, was the first utility commission in the country, established in 1885. The Cannabis Control Commission, a more recent creature of law, was born from a 2016 referendum, with its mandate revised by 2017 legislation.

Decades before cannabis became illegal, and well over a century before states began to decriminalize and legalize the plant, utility regulators were already beginning to set guidelines for centrally distributed energy service and both regulators and case law began to build legal precedent and expectations. As cannabis was in the process of being outlawed, America was being electrified, with fundamental questions of public and private ownership, energy access, and adequacy of service at play. By the mid-twentieth century, Principles of Public Rates outlined fundamental concepts used by utility regulators in much of their work today.

Energy is a public utility. In Massachusetts today, this means publicly available, indiscriminate service delivered principally by private business actors which, over time, have consolidated into larger corporate actors. While the initial phase of centralized heat and power involved competing wires, technologies, and corporations, cities and states soon began granting utilities monopoly status in a regulatory compact that would enable the public at-large to access energy, enable utilities to scale up efficiently, and avert a sprawled mess of competing utility lines.

Whether or not a regulated energy monopoly makes sense, now is a debate that could literally last for a century. But in comparing the DPU to the regulatory agency overseeing the emergent cannabis industry in Massachusetts, it is crucial to note how the agencies’ treatment of monopoly is fundamentally different. DPU, as noted, regulates monopolies––in fact, the only utilities exempt from most of DPU’s regulatory regime are publicly owned municipal utilities––and additionally regulates expenditures of utility ratepayer dollars on energy efficiency and clean energy programs.

The CCC, on the other hand, explicitly prohibits monopoly by regulation, limiting ownership to three licenses to a given class, and the agency has issued fines to monopoly businesses that have violated these rules.  Furthermore, the CCC’s enabling legislation explicitly directs the commission to pursue social equity, by advancing “procedures and policies to promote and encourage full participation in the regulated marijuana industry by people from communities that have previously been disproportionately harmed by marijuana prohibition and enforcement and to positively impact those communities.” This mandate, which advocates note has been frustrated by inadequate equity funding, municipal shakedowns and by technical glitches in the enabling statute, necessitates proactive confrontation of inequities in ownership and capital, in the history of the war on drugs, and those inequities still enshrined in the law.

So what does this structural difference mean in practice? It would, of course, seem bizarre and inappropriate for a public utility regulator to be rallying in the streets to support regulated businesses, propping up the bottom lines of energy behemoths like Eversource and National Grid. And yet, while their advocacy is not so direct, it’s not as if DPU Commissioners are silent on policy: commissioners engage with the legislature, speak on energy industry panels, defend controversial legal positions in court, and intervene in proceedings of the Federal Energy Regulatory Commission.

Responsible utility regulators could take a cue or two from the “brazen” social justice advocacy of members of the CCC, by standing up for ratepayers, defending workers, and promoting clean energy rather than penalizing it. Instead, the MA DPU has actively opposed efforts toward social and economic equity, rejecting energy efficiency incentives intended to bridge socioeconomic divides and throwing up roadblocks to solar access. It has approved ratepayer funding for interstate gas facilities and effectively denied its obligations to combat climate change. It has enabled a form of regulatory capture, as regulated utilities seek ratepayer dollars for membership to trade associations that lobby against clean energy and for fossil fuel interests.

Where the general public is concerned, it’s clear that the DPU is, even for a utility commission, uncharacteristically closed off. The agency does not maintain email or social media presence to notify the public about its operations, proceedings, or even basic information on utility service. This is distinct from states like Texas, North Dakota, Pennsylvania and numerous others which at least maintain social media accounts. Although there are real reasons to limit correspondence to prevent ex-parte communication, by so wholly excluding the public, the DPU effectively creates a process that is friendly to well-resourced industries but unfriendly to utility customers and environmental justice populations.

Perhaps the DPU, like the CCC, needs a legislative mandate and a mission statement that includes equity and gives the agency a course correction with regards to climate change and public participation in regulatory proceedings. This would bring DPU more in line with the California Public Utilities Commission and California statute, which, unlike Massachusetts, has codified environmental justice into law.

Meet the Author

Joel Wool

Masters in urban and environmental policy/Boston City Council aide/Clean Water Action, Tufts University
Regardless, it is clear that public utility commissioners are advocates. The current DPU chair is a former utility official, the past chair emerged from Associated Industries of Massachusetts, which counts utilities among its members, and another currently serving commissioner is a failed Tea Party candidate for congress who believes the Federal Department of Energy should be disbanded. As such, their advocacy is slanted towards a political bent that is pro-utility, anti-environment, and that limits “equity” to equal treatment within residential and commercial customer classes.

If Department of Public Utilities commissioners are quieter than members of the Cannabis Control Commission, it is not because they have not exercised political influence: it is because protecting the powerful and upholding the status quo does not require the same kind of vocal advocacy as is needed to empower historically marginalized populations. In creating an energy system that works for all, Massachusetts may in fact need energy regulators who embrace the disruptive agitation modeled by public officials who have truly committed to securing equity under the law.

 Joel Wool holds a masters in urban and environmental policy from Tufts University and previously worked on public policy for Clean Water Action and Boston City Councilor Lydia Edwards.