Policy Profile

New Utility Business Model Proceeding

Policy description:

Utility regulation varies, to some extent, by state utilities commission. Most Commissioners and commission staff, however, still adhere to the regulatory principles outlined by James Bonbright in his seminal text, Principles in Public Utility Rates (1961). At the time, most utility companies were vertically integrated, were experiencing increases in load, and had the ability to capitalize on economies of scale for new generation. These “natural monopolies” warranted a state regulatory body that could balance the tradeoff between efficiency (in the form of least cost production) and equity (consumer protection). Many have argued recently that the regulated utility industry needs a new set of principles that are more sophisticated, forward-planning, and incentive-based. For more information, see the full policy brief.

Download Full Policy Brief View Policy Component Questions

  1. Has a Legislative Task Force or utility commission proceeding examined utility business models?
  2. Was a report issued by the task force or after the proceeding?
  3. Does the report contain recommendations for changing utility business models?
  4. Has the state followed up on those recommendations?