We've talked a lot about some aspects of federal energy policy in terms of its impact on the electricity market. And it's really important to what changes will happen and what must occur. But if electricity regulation and policy were a wedding, state regulation is the bride. What do I mean by that? State regulators call many of the shots when it comes to electricity regulation. They often take center stage and it's always been like that. In the very beginning of this course, you saw that in the crash history animation lesson, that 100 years ago, this market was set up so that states could make the call when it comes to electricity within their state boundaries. This was done because of the natural monopoly status of the utilities and also as a way to make sure the local utilities met the needs of their residents and businesses. And they also wanted to make sure that the utility would continue to meet state goals, which generally include things like economic development and environmental protection.
So, Melissa Day, as you know, electricity was developed in the late 1800s and early 1900s. And what happens is, is they naturally formed as monopolies. And so in our society, we have many areas and sectors that are competitive, but we do have a few that are monopolies. And in these cases, many of the states, or almost all of the 50 states, have created public utility commissions that go again, way back to the 1800s, to go ahead and regulate these monopolies. Obviously, one company can't go ahead and build electric generation and transmission through the power lines and have everyone held captive and charge them exorbitant rates. So, public utility commissions go ahead and monitor the monopoly-like companies.
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State regulation, which is handled by the public utility commissions, is responsible for approving a lot of critical decisions. When I think about a license to operate for electric utilities PUCs are the first thing that comes to mind.
As a regulated utility, we have multiple layers of regulation. Primarily, you're going to be looking at the federal level, which they're looking at wholesale transactions. And then you have the retail level and the state level. So in Colorado, we have the Colorado Public Utilities Commission. Each state across the country usually has some kind of public regulation commissioner, public utility commission. They may have a slightly different name in each of the states.
PUCs are responsible for overseeing retail sales to end users, that's us. As well as the businesses that use the electricity, which is all of them, and that includes approving rates. They also oversee the low voltage distribution lines, where the power plants and transmission lines are sited, meaning where they're located. One of the biggest issues in this area is that neighborhoods can protest the placement of a transmission or distribution line. And they often do. We all want reliable electricity and most people want to live in a state that is growing from an economic development standpoint. But, often, we don't want to see the poles and wires in our backyards and parks. And as we've talked about before, burying distribution lines is not always possible from a technical or from a cost perspective. Interestingly, the PUC does not have responsibility for hydroelectric facility siting, licensing, safety, or recreational use. This is the responsibility of FERC. Even before the modern electric grid, the US federal government has overseen national water resources.
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The other thing the PUCs oversee is the utilities for the portfolio of generation types to serve customers. A utility files a plan of what resources they intend to use, whether it's coal, natural gas, and/or renewable energy. The PUC is then responsible for approving the mix being planned by the utility. You already know that state government in the form of public utility commissions approve or disapprove what utilities can charge.
So, we won't spend any more time on that, I know you've got it. So, who watches over the PUC? It's worth noting even the PUCs are regulated. Each state has a legislature that reviews changes to utility laws, rules, and regulations. It's a pretty extensive system of checks and balances. It's worth taking a deeper dive into individual state's focus on the environment which we will tackle in the next article.
Read also,
Learn Siemens PLC Programming (TIA Portal v13)
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Learn Fatek PLC Programming
So, Melissa Day, as you know, electricity was developed in the late 1800s and early 1900s. And what happens is, is they naturally formed as monopolies. And so in our society, we have many areas and sectors that are competitive, but we do have a few that are monopolies. And in these cases, many of the states, or almost all of the 50 states, have created public utility commissions that go again, way back to the 1800s, to go ahead and regulate these monopolies. Obviously, one company can't go ahead and build electric generation and transmission through the power lines and have everyone held captive and charge them exorbitant rates. So, public utility commissions go ahead and monitor the monopoly-like companies.
Read also,
Learn Siemens PLC Programming (TIA Portal v13)
Learn Arduino UNO
Learn Fatek PLC Programming
State regulation, which is handled by the public utility commissions, is responsible for approving a lot of critical decisions. When I think about a license to operate for electric utilities PUCs are the first thing that comes to mind.
As a regulated utility, we have multiple layers of regulation. Primarily, you're going to be looking at the federal level, which they're looking at wholesale transactions. And then you have the retail level and the state level. So in Colorado, we have the Colorado Public Utilities Commission. Each state across the country usually has some kind of public regulation commissioner, public utility commission. They may have a slightly different name in each of the states.
PUCs are responsible for overseeing retail sales to end users, that's us. As well as the businesses that use the electricity, which is all of them, and that includes approving rates. They also oversee the low voltage distribution lines, where the power plants and transmission lines are sited, meaning where they're located. One of the biggest issues in this area is that neighborhoods can protest the placement of a transmission or distribution line. And they often do. We all want reliable electricity and most people want to live in a state that is growing from an economic development standpoint. But, often, we don't want to see the poles and wires in our backyards and parks. And as we've talked about before, burying distribution lines is not always possible from a technical or from a cost perspective. Interestingly, the PUC does not have responsibility for hydroelectric facility siting, licensing, safety, or recreational use. This is the responsibility of FERC. Even before the modern electric grid, the US federal government has overseen national water resources.
Read also,
Learn Siemens PLC Programming (TIA Portal v13)
Learn Arduino UNO
Learn Fatek PLC Programming
The other thing the PUCs oversee is the utilities for the portfolio of generation types to serve customers. A utility files a plan of what resources they intend to use, whether it's coal, natural gas, and/or renewable energy. The PUC is then responsible for approving the mix being planned by the utility. You already know that state government in the form of public utility commissions approve or disapprove what utilities can charge.
So, we won't spend any more time on that, I know you've got it. So, who watches over the PUC? It's worth noting even the PUCs are regulated. Each state has a legislature that reviews changes to utility laws, rules, and regulations. It's a pretty extensive system of checks and balances. It's worth taking a deeper dive into individual state's focus on the environment which we will tackle in the next article.
Read also,
Learn Siemens PLC Programming (TIA Portal v13)
Learn Arduino UNO
Learn Fatek PLC Programming
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