Equity at the Public Utility Commissions: Recent Research and Lessons
Foreword: References to “Public Utility Commissions” refer to the quasi-judicial state agency that is responsible for the regulation of public utilities, i.e. gas, electric, water, and in some cases, sewer providers and transportation services. Public utility commissions go by a variety of other names (Public Service Commission, Utility Regulatory Commission, etc.), but share a common purpose: to review the activities of utilities under their purview to ensure safe, reliable services. This role, often overlooked, is especially important because utility service is often viewed as a basic human need (heating, water, electricity to cook with) and by some scholars as a human right.
Also, if you identify as a research nerd and want to jump right into the nitty gritty, you may review the collection of equity resources produced for this project. A Powerpoint presentation and brochure are also included for individuals who prefer brief, visual resources.
Marguerite Behringer at the 2021 National Association of Regulatory Utility Commissioners (NARUC) Annual Meeting in Louisville, Kentucky. Materials were presented at the Staff Subcommittee on Energy Resources and the Environment on November 7, 2021.
In the summer of 2021, board member Marguerite Behringer, Director of Research and Consulting at E9 Insight, collaborated with the Yale Center for Business and Environment and the Institute of Market Transformation (IMT) to research public utility commission mandates related to equity and decarbonization. While much research on decarbonization policy exists, “equity” is an emerging topic in the energy industry, made increasingly important as the industry considers disparate impacts of climate change and the systemic shift to renewable resources. Larger questions about who has to pay for what and how much further complicate electric and gas planning procedures. The term “equity” has evolved in these plans from referring strictly to financial assets to representing a broad discussion of how customer groups are disproportionately impacted by utility programming, planning and spending. A formal definition of energy equity is offered by the Department of Energy’s Pacific Northwest National Laboratory:
Energy equity recognizes that disadvantaged communities have been historically marginalized and overburdened by pollution, underinvestment in clean energy infrastructure, and lack of access to energy-efficient housing and transportation.
This niche topic has grown increasingly important over the last three years as legislators passed new laws requiring state agencies to consider a range of innovative values and impacts in decision-making. Almost all public utility commissions pursue goals to “protect the public interest” and “ensure safe and reliable utility service,” sometimes with an added “at just/affordable rates.” Fewer include “environmental protection/preservation,” though some utility commissions have followed this goal since the 1980s or earlier.
Drawing from examples in existing statutes, Marguerite’s research reviewed instances where utilities and/or regulators were required to consider environmental justice, impacts on disadvantaged or historically underrepresented communities, diversity and inclusion, new engagement policies, or energy burden. These terms recognize that characteristics beyond “low-income” – such as class, historical systems of oppression, race, neighborhood, proximity to generating plants – impact a customer’s relationship to their utility service and bills. At the time the first round of research was completed in July 2021, public utility commissions in ten states were subject to some form of equity mandate. By the time this research was shared with a national audience at the National Association of Regulatory Utility Commissioners (NARUC) Annual Meeting in November 2021, another two states (Illinois and North Carolina) had adopted legislation with equity components.
Map of equity mandates and programming at the U.S. public utility commissions, produced in November 2021.
Over 147 reports, public utility commission orders, bills, and utility filings were identified across state executive, legislative, and regulatory branches. Activities were further categorized according to “pathways,” indicating how equity and/or decarbonization would be achieved. Example pathways include “broad” (i.e., the commission must consider equity in all decisions), clean energy, distributed energy resources, electric vehicles, GHG costs, rate design, and other categories. Preliminary discussion of the research with a grassroots-based coalition convened by IMT highlighted emerging topics in equity, including engagement (i.e. how well can the consumer engage with the regulatory process); internal public utility commission initiatives to promote equity; and workforce transition plans, typically designed to support communities whose economies rely on fossil fuel plants. See the full report for further information on pathways.
The data showed that while significant activity is occurring at public utility commissions (84 activities and many more beyond this survey), few of those actions can be considered a pathway to changing ongoing commission requirements. Of the 24 pathway activities at the public utility commissions, 12 activities were at the California Public Utility Commission, which holds greater autonomy than most PUCs. The Oregon Public Utility Commission discussed its relationship to the legislature in a 2018 report, stating, “The PUC cannot require utilities to accomplish societal objectives that are outside the scope of utility regulation and that impose costs that the Legislature has not required... The PUC must implement these specific policies against the backdrop of its general legislative mandate, which does not expressly include reducing greenhouse gas emissions.” This identified inconsistency was later addressed by legislation that authorized the PUC to make decisions to reflect new GHG emissions reduction goals. This scenario illustrates the dependency of the commission’s actions on its legislative authority, which can only be changed through the legislative process. Despite this observation, several regulatory commissions, notably in Michigan and Connecticut, have driven their own equity processes and investigations.
Interest in energy equity is also growing, as can be seen from the list of academic equity research resources cited in the Equity Brochure. New investigatory proceedings and stakeholder engagement requirements have prompted challenging questions about how to truly design equity – and research – that authentically address the needs of burdened communities. These communities may not have the time, interest, legal background, language competency, or resources to engage with the utility commissions, which are notoriously difficult to navigate. Furthermore, regulators must be wary of extracting from these communities and creating more burdens.
Despite these realities, a clear message came through discussions with the IMT advisory panel: truly equitable policy and research must be informed by conversations with impacted communities as early in the process as possible. As one member described, “Equitable policy design without input from frontline communities will lead to whitewashing. You’re then left with a policy that was designed by privileged, often white, people with predetermined outcomes for communities they have never lived in.” This dynamic emerged in our research when the advisory panel described, towards the end of the project, their frustration that low-income programming, energy assistance, and disconnection policies by zip code were not reviewed in E9 Insight’s 50-state categorization chart. Incorporation of these elements in a future research project will paint a more complete picture of how “equitable” a given state is, and there are many other elements to explore (if you know of someone who is interested in this kind of project, please email Marguerite).
The evolution of the “Pathways to Changing the PUC Mandate: A Regulatory Review” project to its presentation at the NARUC 2021 Winter Meeting drew the attention of audiences from across the country. In a bittersweet manner, this data is already outdated by the submission of new policies and programs, and hopefully, this body of work will continue to grow. Clean Energy Action is proud to be part of the learning, growing community of energy advocates who care about equity. If you have ideas, reactions, or comments you’d like to share about this research or related to how equity is showing up at the Colorado PUC, send an e-mail to the Board.