Gov. Paul LePage now has the opportunity to shape Maine utility regulation.
During any single term of the Maine governor, opportunities arise to make two of the three appointments to the Public Utilities Commission. Now, LePage can have three commissioners of his own choice.
What’s unusual is that LePage can make two appointments at once, because chairman Tom Welch’s retirement gives him a slot to fill plus the one opening next April 1.
The Legislature’s intention in setting terms as it has was to allow the governor to put his or her stamp on the Commission.
Of course, the PUC must follow the law in making its judgments. But the law must be applied to practical cases, allowing commissioners to interpret the law, subject only to legal review by the state’s highest court.
The governor has the right to appoint commissioners whose opinions are likely to be in line with his.
I was Maine’s first Public Advocate and drafted the law that the governor will now apply. So I presume to make some suggestions to Gov. LePage.
He has shown real concern for Maine utility customers to ensure that the rates they pay are not unduly burdensome. Though the PUC must strike a balance between the utilities and the customers, there’s nothing wrong with worrying about the burden of utility costs in the poorest New England state.
Utility rates are really a form of taxation. Like taxes, almost everybody must pay them to get essential services.
So LePage could appoint people who are sensitive to customer costs. What people and companies pay affects their lives and the state’s economic development in the most fundamental way.
To the degree that regulatory decisions have economic effects, the governor may select commissioners with the kind of balance between customers and the economy that he advocates.
For example, through his appointments, LePage could help make sure the cost of natural gas pipelines, which can be built by the private sector, does not find its way into electric rates.
While the law may impose requirements that raise customers’ costs, the PUC has sufficient latitude to apply the law in reasonable ways without excessive burdens. And it can certainly explain the effect on its rate decisions resulting from legislative mandates.
The regulatory system itself imposes costs, all passed on to customers. A newly constituted PUC could set among its priorities the reduction of those costs through simplified procedures, designed to produce sound results in less time. This is a reasonable standard for the governor to apply in making his appointments.
A recent water case has made evident that the governor needs to look into the background of his nominees to avoid possible conflict of interest issues. A good mix of professional backgrounds would help.
An engineer, a lawyer and an economist would make for a good composition of the commission. Ideally, none of them should have worked, in recent years, for investor-owned utilities seeking regulatory approvals. If the commission must include a utility advisor, it should also include a consumer representative.
In addition, commissioners should have a good sense of the regulatory function. They act as judges. That imposes an obligation to be fair, avoiding making policy that should be left to the governor and legislature.
And their selection should include consideration of their ability to motivate and lead the PUC staff.
It also means that the PUC must be allowed the same kind of independence as courts have. Short of a new laws and court appeals, the other branches of government should not try to dictate to the Commission. The power of appointment is where the governor has his influence.
While change may be coming, both the governor and the new PUC should bear in mind the need for continuity. Neither the public nor the utilities are well served if regulatory policy lurches from one side to another. The commissioners should bring about change in a manner that evolves from current policies, so that the PUC can be seen as consistent and reliable.
Just at the beginning of his second term, the opportunity exists for Gov. LePage to create an important part of his legacy. His PUC will last beyond his term, and, handled carefully, it can produce significant long-term benefits for the state.