Republican energy regulators tout success in letter to feds

By EPN Staff

Utility regulators in nine states recently asked President Donald Trump’s administration to respect the success regulated monopoly utilities have had producing reliable and inexpensive electricity as a new task force looks to roll back anti-competitive laws and regulations.

The Republican commissioners said in a formal letter that their regulatory models have been crucial to their states’ economic success and that a Federal Trade Commission and Department of Justice task force the president created shouldn’t disrupt their approach.

"While the Task Force is rightfully reviewing many burdensome regulations imposed by prior administrations, it is essential to distinguish between regulations that stifle competition and those ensuring stability, affordability, and reliability in essential service markets,” they wrote. “The vertically-integrated utility model – successfully managed by elected Republican Public Utility Commissioners – belongs firmly in the latter category."

Why it matters

The Federal Trade Commission announced this inquiry April 14 and promised to be “on the front lines of advancing the President’s agenda to revitalize the American economy.” The review covers a wide range of topics – energy is just one.

“The FTC seeks to identify unnecessary regulations that exclude new market entrants, protect dominant incumbents, and predetermine economic winners and losers,” the commission said in its announcement.

“Realizing President Trump’s economic Golden Age will require unwinding burdensome regulations that stifle free market competition,” Assistant Attorney General Abigail Slater, of the U.S. Department of Justice’s Antitrust Division, said in an accompanying statement. “This Antitrust Division will stand against harmful barriers to competition whether imposed by public regulators or private monopolists.”

In their letter, Republican utility commissioners from Alabama, Arizona, Georgia, Louisiana, Mississippi, Nebraska, South Dakota, North Dakota and Oklahoma called the task force “a vital step toward restoring a competitive economic landscape that fosters innovation, supports entrepreneurship, and protects the rights of consumers.”

They also urged “consideration of the successful conservative regulatory models implemented by elected Republican public utility commissioners across the country.”

“These officials apply time-tested economic principles to regulate electric, natural gas, and water utilities in a manner that is safe, reliable, and affordable,” the commissioners said.

The bigger picture

The commissioners said their states have had success growing nuclear and natural gas generation, supporting Trump’s pro-coal energy strategy and rapidly approving new electric generation needed to serve growing sectors, like data centers and artificial intelligence.

A monopoly utility balanced by state regulators means "low-cost reliable services to the general public" and encourages "the development of new commercial and industrial projects,” the commissioners said.

The FTC and DOJ review flows from an executive order Trump issued in early April calling on federal agency heads to cooperate with the FTC and DOJ to produce a list of recommended changes. The National Law Review published an analysis of the effort, saying the energy industry “could present an interesting policy conundrum” for the administration.

“The smaller, disruptive market participants the task force encourages to speak up are likely non-incumbent alternative and environmentally conscious energy providers,” the publication said on its Antitrust Law Blog. “It remains to be seen whether the Trump administration will have an appetite to advocate for these providers’ competitive footing.”

Additional details

The review mandate is a sweeping one, and the task force has asked the public to weigh in on potential regulatory rollbacks.

Those comments address a wide range of issues beyond energy policy, including:

• Los Angeles rent controls
• Dismantling automobile dealer franchise laws
• Calls for stricter regulations on health insurance companies
• Calls for reduced state regulations on nurse practitioners

Comments can be made through May 27 online at regulations.gov.