Good policies can come from legislation: To get lower taxes, you need lawmakers to approve a bill to lower taxes. But some good policies can come through working in the regulatory process. For example, you can get cheaper, more reliable, less-polluting energy by presenting your case to utility regulators. That’s what Overton Window podcast guest David Stevenson is doing at the Caesar Rodney Institute in Delaware.
As he explains, states set up electricity regulation as an attempt to keep costs lower by avoiding duplication. Transmission lines are expensive, and people aren’t served by two sets if one can do the job. So states establish regional monopolies and craft a regulatory process to get power plants built and operate infrastructure to distribute electricity to users. Electricity customers, in turn, pay for it all with rates approved by an official regulatory body, and the power companies get a guaranteed return.
The regulatory framework needs people to be engaged in the process and push back on providers’ proposals. They can do this by offering public comments, but they can also become an “intervenor” in a company’s proposal to regulators. Intervenors get access to internal information of the companies and can make arguments to the regulatory body, which might sway its decisions.
To give an example that Stevenson used, a power company wanted to build and maintain electric car charging stations and build those costs into its electricity rates, guarantee it a return on that investment.
As an intervenor, Stevenson made his case to regulators that the power company was entering a competitive, non-monopolistic industry. There were, he argued, companies already building out home charging infrastructure, as well as charging stations at convenience stores. In addition, he dug into the arguments the utility companies had made about costs and poked holes in them.
He was able to get some other supporters for his view. The companies building stations on their own initiative were unhappy that power companies wanted to make it a regulated monopoly. Electric car manufacturer Tesla and Chargepoint, a car charging station developer, supported his work.
Some environmental groups, however, were fine with making it a service provided through utilities.
Stevenson did more than getting other players to weigh in on the decision. He also brought research for the board to consider. He assessed the costs of reducing carbon dioxide emissions through electric cars, compared to alternatives. He brought up the work of others on the life cycle costs and environmental considerations of charging stations and electric vehicles. And he tapped into some sales skills to make a persuasive case to the particular commissioners who would decide the matter.
His work convinced the regulatory agency to pare down the utility’s request into a small pilot project. And later, he persuaded regulators to declare that charging stations were a competitive market that did not need state utility regulation.
So he was able to protect the state’s electricity customers from having to cover the costs of electric car charging stations. This means lower prices for customers overall. And it helps to ensure that, if the market for electric cars grows, market forces, rather than regulators, will determine how charging stations are developed.
Utilities can and do build electric car charging stations through regulatory policy, funded by electrical rates assessed on consumers. It happens in other states, including Michigan. And it is still an acceptable issue to talk about in Delaware, placing it within the Overton Window of political possibility. As an intervenor in the regulatory process, though, Stevenson was able to keep it from being an enacted policy and prevent future attempts to make it so through regulation.
While lawmakers can make radical changes in the way utility regulation works, they also create a regulatory process to allow for changes without new laws. Whether the venue is legislation or regulation, the work of David Stevenson shows that the Overton Window gets set by the particular people who engage with it, and one person there can make a difference.
Permission to reprint this blog post in whole or in part is hereby granted, provided that the author (or authors) and the Mackinac Center for Public Policy are properly cited.
Get insightful commentary and the most reliable research on Michigan issues sent straight to your inbox.
The Mackinac Center for Public Policy is a nonprofit research and educational institute that advances the principles of free markets and limited government. Through our research and education programs, we challenge government overreach and advocate for a free-market approach to public policy that frees people to realize their potential and dreams.
Please consider contributing to our work to advance a freer and more prosperous state.