Providing Stability While Leading Change Mark A. Jamison Director - PowerPoint PPT Presentation

Providing Stability While Leading Change Mark A. Jamison Director “Leadership in Infrastructure Policy” www.purc.ufl.edu 1

Purpose(s) of regulation • Limit natural monopoly rents • Provide friendly environment for sunk investments • Provide opportunity for rent seeking • “Don’t cost me the next election” “Leadership in Infrastructure Policy” www.purc.ufl.edu 2

Why independent regulatory commissions? • Problems with regulation by political bodies � Lack of expertise and stability/continuity � Opportunism and corruption � Resulted in • Bankruptcies or embarrassing profit • Limited investment • Stakeholder rent seeking or revenge taking “Leadership in Infrastructure Policy” www.purc.ufl.edu 3

Basic challenge • Regulation was established to deal with problems with human behavior � Technology, world events, and the like change the context, but not the basic problems “Leadership in Infrastructure Policy” www.purc.ufl.edu 4

Basic roles for regulators Sector Goals Technical Instruments • Sufficient and efficient • Ratemaking service • Financial oversight • Service quality • Obligations to serve • Non-confiscatory prices • Market structure Institutional Goals Institutional Instruments • Credibility • Stakeholder input • Legitimacy • Transparency • Expertise • Independence • Capacity building “Leadership in Infrastructure Policy” www.purc.ufl.edu 5

Current context Industry Political • Rapidly increasing costs • Rising populism (energy) • Following the polls • Changing expectations • Scapegoating (environmental; • Mandating without paying technology) • Micromanagement • Rapidly changing industry (telecommunications) • Unrecognized realities (all) “Leadership in Infrastructure Policy” www.purc.ufl.edu 6

Segmenting What Regulators Do What is How can • Engineering •Leadership possible? we do it? • Economics • Management •Finance •Forums •Law What is important? •Politics • Negotiation •Dialogue www.purc.ufl.edu

Emphases What is How can • Technical • Adaptive work possible? we do it? work • Situational • Fundamental • Mingling with • Mingling with stakeholders professional peers What is important? •Perilous work • Situational • Mingling with politics www.purc.ufl.edu

Regulating today is… …disappointing people at a rate that they can endure www.purc.ufl.edu