As the newly elected president of the National Association of Regulatory Utility Commissioners (NARUC), David Wright will serve as the primary voice for state public service commissioners, taking their message to Congress, the courts, and administrative agencies. We sat down with Mr. Wright to discuss his goals for the coming year and the challenges of updating the country’s utility infrastructure.
Q. Congratulations on being elected President of NARUC. You outlined your theme for the year as, “Effective Regulation Takes Teamwork.” Can you discuss the role State energy officers and consumer groups play on your team?
State energy officers and consumer groups are more than just players on the team, they are specialty coaches. They are a valuable resource to commissions and NARUC because they provide information, as well as feedback, that help in the decision-making process. By encouraging everyone involved in the NARUC organization to improve themselves through educational opportunities, learning from each other through interaction, challenging each other through discussion and openly sharing ideas and best practices, I believe our NARUC team will made stronger and the policies and decisions we make will be more thorough.
Q. Given the onset of new environmental rules and the ongoing dialogue between NARUC, the National Association of State Energy Officers, and the National Association of Clean Air Agencies, how important is it for State government agencies to reach out and “team up” together on some of these issues?
As my theme indicates, I’m seeking an all-aboard approach. Given the high-profile nature of energy these days, coupled with the tough economy, State energy agencies need to be in better communication. We deal with many of the same issues, but in different fashions. With the raft of new environmental rules coming from Washington, we need to at least understand each other and our responsibilities. State and Local Energy Report does a great service to its readers by bringing together regulators, energy officers, and energy assistance directors. So I appreciate this opportunity to discuss these issues with you.
Although our responsibilities in dealing with energy differ, our core mission is the same: to protect the consumer. We must give the consumer the tools necessary to control their energy usage and therefore lower their bills. Rates are going up, and will continue to do so as we invest in new infrastructure and modernize the grid. We need to make sure our agencies understand the importance of educating consumers, and educating ourselves is a great place to start.
Q. What do you see as some of the major national challenges facing public service commissioners and how do you see organizations like NARUC helping to address those challenges?
I’m going to sound like a broken record, but the economy is the biggest challenge we face. It impacts everything, from our ability to invest in the system to adopting new ‘smart’ grid technologies. At our Summer Meetings last July, we held a panel with representatives from all the utility sectors—water, electricity, natural gas, and telecommunications—where we discussed how much money will be needed for updating our nation’s utility infrastructure.
A reporter kept a running tab during the discussion and estimated that, for all four sectors, the combined amount is roughly $4.11 trillion. That’s trillion, with a ‘T.’ As you can imagine, many chins fell to the floor during this panel. What is most striking, as a commissioner, about this figure is that the bulk of this money will come from the same people—ratepayers. Anyone who has an electricity bill, a gas bill, a water bill, and a smart phone is going to pay for this investment.
So this makes my job, and all of our jobs, much more difficult and important. Consumer education is paramount as we face these massive rate increases. Anything we can do to help our consumers take more control over their energy usage will help.
NARUC plays a crucial role by bringing so many people together. Our jobs as utility regulators don’t always make for easy conversation, so having a place to discuss best practices with our colleagues from across the country is a major benefit. We can learn how States are handling issues like pipeline safety, transmission development, and smart grid deployment. So I think NARUC will be an important voice as we face so many challenges in the near future.
Q. You’ve mentioned the tough economy and protecting consumers. One issue of great interest to our readers is LIHEAP. Congress cut the amount available in LIHEAP last year, and even though the economy is still in rough shape, it looks unlikely that it will be increased this year. How will these expected cuts impact consumers?
It is unfortunate that Congress and the Administration are cutting funding for this program, particularly in this economy.
The fact is things are going to get worse for our consumers before they get better. Consumers have always borne the majority of the costs associated with our utility system, but they have benefited with affordable rates and reliable service. The transition to a cleaner, more efficient system will create inequalities in the form of higher bills for consumers in certain areas. While there will certainly be benefits, we must make sure they are not outweighed by the costs of compliance. So in a time when we should be looking for ways to assist our ratepayers, Congress and the Administration are doing just the opposite.
Unfortunately, even if Congress funds LIHEAP at its authorized amount, this still isn’t enough. I don’t know if people in Washington truly understand how these higher costs will affect people back home. Today, many consumers are struggling to pay their bills. What happens when we start increasing their rates even more? What recourse do they have? What kinds of choices will they make, and will these decisions have a ripple effect?
Q. NARUC and the Federal Energy Regulatory Commission recently announced the formation of a Joint Forum on Reliability and the Environment. What will this Forum do and how will it interact with the Environmental Protection Agency, consumer groups and others?
This forum will serve as a venue for an open, honest discussion on the several new environmental rules being proposed by the Environmental Protection Agency. I want to thank FERC Chairman Jon Wellinghoff for appointing Commissioners Cheryl LaFleur and Philip Moeller as federal co-chairs, and they will serve alongside NARUC First Vice President Philip Jones of Washington and our Treasurer David Ziegner of Indiana.
I envision this forum serving as a sounding board. EPA has proposed some new rules that, no matter what you think of them, will impact States and regions in different ways. The North American Electricity Reliability Corporation, in a recent report, has raised concerns about the potential for local reliability problems. We take this report seriously and want to hear more about how EPA will address these issues.
EPA will also participate in our discussions and I am most appreciative that they will be at the table. NARUC has no position on the EPA rules, but we have asked for flexibility. This forum will give all parties an opportunity to talk about these issues in a transparent way. Other than that, it is a little too early to speculate what kind of deliverables, if any, this forum will produce.
Q. Following up on that, what have State commissions done to move toward a cleaner energy system?
I am proud to say that my State colleagues have taken the lead on adopting clean energy policies. More than half of the States have adopted renewable portfolio standards, and all of us have implemented policies and programs that promote energy efficiency, weatherization, etc.
In South Carolina, our Office of Regulatory Staff has been instrumental in developing the Palmetto Clean Energy program, a non-profit entity that supports the purchase of renewable energy in the State. Our three main investor-owned utilities are involved as well.
We have a good story to tell and I don’t think States get the credit we deserve. Having the States lead the way ensures that we are not creating winners and losers or favoring certain renewable energy resources over others. Each State is different; we have our own natural resources and a one-size-fits-all approach does not make sense.
Q. What kind of legislation do you foresee Congress focusing on this year?
Well, we expect Congress will continue hearings on the EPA rules, especially the new Mercury and Air Toxics Standard, now that it is final. We also anticipate action on cyber security as well.
Otherwise, in an election year, we suspect that just about anything will be discussed, but not much will happen. Congress addressed one of the most glaring energy issues when it passed pipeline safety legislation late last year, which the president recently signed into law.
Congress has never shied away from using NARUC as a resource so we will be ready and willing when and if we are called! n
Posted on: February 7th, 2012