The LPDD team is particularly excited to announce the publication of a new set of model legal provisions focused on how to realign state energy regulatory bodies around environmental and decarbonization goals. This important contribution to the LPDD implementation project was drafted by Megan Terrell, a partner at Plauche & Carr LLP, of Baton Rouge, La, and was peer reviewed by Craig Gannett, a partner at Davis Wright Tremaine in Seattle. The model provisions can be viewed here.
Excerpted from the introduction to the model provisions:
One of the obstacles to achieving decarbonization in the electric power sector is that many of the laws and statutes that govern PUCs are antiquated. The absence of statutory requirements to consider climate effects in making electric power decisions can hamstring the transition to decarbonization.
Recommendations provided in Legal Pathways to Deep Decarbonization to overcome this obstacle include aligning public utility policies with broader energy goals related to decarbonization. This can be achieved by requiring public utility regulators to consider decarbonization and creating a state energy office with oversight authority over basic energy policy decisions. Requiring PUCs to consider decarbonization can be achieved through the addition of an explicit mandate to consider climate effects or through a more generalized mandate to consider the public interest and other relevant environmental costs, benefits, and risk mitigation factors. Since many states already have an energy office, another option would be to require commissioners to align policy priorities with other state energy and environmental goals and consider other environmental externalities when making electric power decisions, including rate-making. Additionally, the duties and functions of the existing state energy office should be reviewed and amended as needed to ensure that office also has the statutory authority to coordinate with the state PUC.
This Model State Law Provision to Achieve Regulatory Realignment of Public Utility Policies with Energy and Environmental Goals provides a framework for promoting decarbonization by balancing a PUC’s economic and consumer protection goals of ensuring just and reasonable rates with existing public interest policies implemented through state energy and environmental officials. The Model Provision is not intended to be a comprehensive, stand-alone state law. Instead, it is series of provisions designed to be added to existing state legislation creating public service commissions and providing for their duties and responsibilities.
The three main objectives of these model provisions are to: (1) amend existing PUC rate-making authority to include consideration of the public interest and other environmental externalities related to climate effects; (2) ensure PUCs have sufficient staff, resources, and technical expertise to advance state energy policies through its regulatory decision-making or the ability to utilize other agency resources and expertise; and (3) create a state energy office or, if such an office already exists, amend its existing statutory framework to ensure that office has the authority to coordinate state energy goals, including carbon reduction objectives, with its PUC, coordinate state energy goals with other states and the federal government, and participate in regional discussions, including interstate compact initiatives.