NARUC Winter Meetings: A Confab to Distort Energy Markets

I attended the National Association of Regulatory Utility Commissioners (NARUC), the trade association of public officials and staff that regulated utilities, from Sunday, February 3 to Wednesday, February 6.  It was quite a depressing experience.

I was part of a team in the 1980s and 90s that promoted a transition in natural gas policy from a statist orientation to one of greater reliance on market forces. Needless to say, that transition has been phenomenally successful. (I might also note that such a transition in telecommunications was also very successful.) Yet, I doubt I heard the word competition, deregulation, or reliance on market forces five times at the conference. Rather, nearly every panel and discussion centered around policies and programs that promoted a statist approach to regulation. Even allowing for the legitimacy of intervention into utility markets to address externalities and monopoly problems, there was precious little enthusiasm for using market mechanisms to address these problems.

Most depressing of all was the sheer number of nonprofit organizations who had a vested interest in distorting energy markets and the complete lack of organizations whose goal was to promote efficient operation of energy markets. Industry trade associations can sometimes be counted on to promote policies that would rely on markets but they do so largely from a self-interest perspective not from the perspective of what is most efficient for society.

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