Legal & Regulatory

This May, the Arizona Corporation Commission (ACC) rejected a proposal by Southern California Edison (SCE) to build Devers-Palo Verde No. 2 (DPV2)—a 230-mile-long, high-voltage transmission line connecting California and Arizona. The line, approved by the California Public Utilities Commission (CPUC) four months earlier, would enable SCE to import additional low-cost electricity from Arizona. The ACC’s rejection of DPV2 highlights a significant challenge for state and regional resource planners—weighing state interests against the regional benefits of interstate electricity commerce.

While elected officials in Washington debate the politics of climate change, state legislators and regulators have been busy putting in place programs to reduce greenhouse gas emissions. For the most part, the goals of the programs reflect desired changes to power supply and consumption: increasing the efficiency of electricity generation and delivery, using less fossil […]

Congress’s enactment of the Public Utility Regulatory Policies Act of 1978 (PURPA) triggered a revolution in the development and construction of power plants. PURPA’s creation of an independent class of generators—qualifying facilities (QFs)—exposed a century-old economic myth that had justified restricting ownership of generating facilities to governmental and investor-owned utilities (IOUs). The success of QFs […]

  Historically, states have delegated responsibility for establishing and implementing their energy policy to a public utilities commission (PUC). During most of the 20th century, state PUCs operated with relatively little interference from state legislators. In California, for example, the PUC, created by the state constitution, was vested with the broad authority to independently regulate […]

  State policy makers are characteristically reluctant to recognize that they have advanced a policy as far as they can, and that they must cede some control to fully realize its ultimate benefits. Ceding control often runs counter to policy makers’ political instinct to serve their constituents. Doing so is even harder when a new […]

  The debate over retail choice has resurfaced, triggering in the minds of many consumer advocates California’s failed deregulation attempt and its fallout—rolling blackouts, bankrupt utilities, and government bailouts with crippling long-term consequences. Before allowing a chorus of "oh no, not again" to cloud the debate, state policy makers should realize that allowing generators to […]

Almost half of U.S. states now insist that their investor-owned electric utilities serve a specified percentage of their load with electricity from renewable resources by a date certain. Utilities struggling to comply with their mandate increasingly warn that they will be unable to achieve the required level on time. Yet even as utilities express these […]

The financing of power generation projects increasingly depends on the execution of a long-term power-purchase agreement (PPA). A common prerequisite for considering a PPA to be "effective" is a "final and nonappealable" regulatory order approving it. Purchasing utilities justifiably insist on such certainty to immunize their PPAs from after-the-fact regulatory scrutiny and possible penalty. Unfortunately, […]

U.S. demand for natural gas is projected to increase by more than 50% by 2020. Companies are building—and the public is opposing—receiving terminals on three coasts that would increase imports of liquefied natural gas. The pros and cons of "opening up" Alaska, coastal waters, and federal lands to drilling are still being debated. These politically […]

  What’s in a name? Plenty, if the word is "renewable." Intuitively, most people outside the energy industry consider hydroelectric power "renewable." The dictionary defines the word as follows: "capable of being replaced by natural ecological cycles." Accordingly, rainwater should indisputably qualify as renewable. Yet since the early days of renewable portfolio objectives, most hydro […]