Will Governor Paterson Repurpose the Public Service Commission to Protect Consumers?

With the unanticipated resignation of Commissioner Cheryl Buley, Governor Paterson will soon be able to pick a majority of the five-member Public Service Commission. In addition to filling the new vacancy, terms of two commissioners appointed by prior governors will expire soon, in February, 2009.

Over the last decade, traditional utilities, power producing utilities, power trading utilities, and new retail gas and electric companies enjoyed the benefits of a PSC mission to deregulate the wholesale and retail generation portion of the industry in the state. To win utility cooperation in its effort to replace regulation with markets, the PSC approved mergers and new holding company structures, and relaxed its oversight of utility costs, services, and profits under the rubric of multi-year rate case settlements and “performance regulation.” See Assembly Task Force Report on Queens Outage, Part II: Improving the Accountability of Con Edison and the PSC.

Apart from stellar opportunities and revenues for some utilities, the fruit of the Commission’s policies yielded new challenges, including

When the last PSC commissioner vacancy occurred, consumer groups urged the appointment of a new PSC Chair less devoted to market nostrums and more attuned to consumer concerns. See Governor Spitzer Asked to Name Pro-Consumer PSC Chair. Now, Governor Paterson will soon have three picks, and thus a real opportunity to repurpose the PSC. Will the Governor seize this opportunity to modify composition and direction of this body which has enormous impact on the safe provision of reasonably priced utility services essential to the public welfare and the economy of the state?

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