By Kennedy Maize
Washington, D.C., February 5, 2011 – We are all familiar, sometimes too much so, with utility regulation. As customers, we encounter the results regulation every day. Many of us, in our business lives, work with (or against), ponder, and praise (or damn) utility regulation.
But none of us has given more thought, or thought more clearly, about every aspect of utility regulation than Scott Hempling, the executive director of the National Regulatory Research Institute. One of the fine innovations Hempling has brought to NRRI since he moved it from Columbus, Ohio, several years ago to the Washington, D.C., area has been a monthly essay on the NRRI website. These essays are always provocative, frequently funny, sometimes whimsical, and not to be missed.
Let me state here that Scott Hempling is a friend. I have known him for some 25 years, in his previous roles as a regulatory lawyer who often represented state regulators, as a teacher of regulatory principles and policies, and as a provocative source of information and opinion (unfortunately, usually off the record). When I want an original, penetrating, and acutely acerbic view of some regulatory development, I contact Scott. I also republish his essays occasionally in the online magazine I edit, MANAGING POWER.
Now NRRI has collected the first 32 of those essays – each a pointed 1,000 words aimed at the diverse audience that state utility regulators constitute – in a new book, “Preside or Lead? The Attributes and Actions of Effective Regulators.” It is no surprise to those who know him that Hempling advocates “lead” over “preside.”
Hempling has organized the essays into six parts, spanning the globe of regulatory concerns from what makes an effective regulator; the role of regulators; obstacles to regulation; jurisdictional turf wars; desirable characteristics; and one example of regulation at its best, the decision last year of the Maryland Public Service Commission rejecting Baltimore Gas & Electric’s original smart meter proposal as not serving customers, telling the utility, if effect, “No, until you get it right.” BGE eventually got it right.
Hempling’s book deserves – demands – shelf space in the office of anybody who works with, thinks about, or attempts to influence utility regulators. It’s also very accessible and presents important concepts with remarkable clarity, simplicity, modesty and good humor.
Hempling, after many years of contact with the men and women who deal with our utility monopolies as surrogates for market forces, is honest about the process of regulation and often uplifted by the people who make regulatory decisions and policy. He writes: “Inspiring these essays are these several hundred, multi-billion-dollar decision-makers. Their diversity amazes: appointed or elected; ages 25 to 75; some mid-career, moving up the political ranks; others capping their careers after decades of professional contribution in the private sector. At any one time, the super-majority are new to the field – music teachers, physicists, chemists, advertising executives, coal miners, mayors, city managers, Wall Street money dealers, Main Street shopkeepers.
“But their diversity pales compared to their commonality: a nail-biting realization that their legal obligation – to establish and enforce performance standards in these critical industries – will demand every available ounce of intellect, savvy, humility, grit, and courage.”
Scott Hempling, “Preside or Lead? The Attributes and Actions of Effective Regulators,” National Regulatory Research Institute, 8730 Georgia Ave., Suite 210, Silver Spring, MD 20910.