Utilities Facing Regulatory Reform Due to Wave of Outages
They say that life isn’t fair, and the wave of regulatory reform that utilities are currently faced with on the heels of the recent pattern of extreme weather is a perfect example of this. Can utilities really control the weather? Apparently, some legislators seem to think so.
Examples of Utility Regulatory Reform
One example of regulatory reform that utilities must deal with can be found in the state of Connecticut. In September 2020, the state government passed the “Take Back Our Grid Act” in order to “increase oversight and accountability over widespread outages.”
What prompted the passing of this Act was the damage from Tropical Storm Isaias, and one of the Act’s main provisions is that the state’s utilities are now on the hook to reimburse customers who experience food and/or medicine spoilage from an extended power outage.
But it’s not just Connecticut politicians demanding increased concessions. California is another state that has been rocked with devastation and is now steamrolling multiple mechanisms for regulatory reform. The state government has already imposed many new rules on the state’s electric utilities, and now the state’s telecom industry is under fire (no pun intended). The fires have caused hundreds of thousands of wireless outages, which has prompted the California PUC to make a push to require backup generators at all cellular towers.
These are just two examples, but you can bet that many more campaigns for increased utility regulation will be coming down the pike over the next few years.
Now, don’t get me wrong, I’m generally okay with regulatory reform, but only if it makes sense. For instance, I can understand California’s cell tower backup power requirement, that makes sense. But it’s hard to understand why utilities in Connecticut should pay for food spoilage in addition to everything else they’re doing to harden their systems and speed up restoration times.
Like it or not, utility regulatory reform is something that most of us will have to deal with in the future. Hopefully your company employs good lobbyists!
