In routine, non-rate setting activities of most commissions, regulators frequently assess the environmental implications of their decisions, at least when they are aware of them. Because electric restructuring rewrites the ground rules for the electric industry in a profound and unprecedented way, regulators have reason to take a broad a view when considering possible alternative policy approaches. The very fact that the electric industry has such a large footprint should prompt policymakers to consider carefully environmental impacts when inventing new rules. As a first principle and at a minimum, regulators ought to make sure their restructuring decisions do not result in harm to the environment. One step that can be very informative is to consult directly with state environmental regulators on the implications of restructuring options.
Environmental regulators can detail the air impacts of state and regional power plants.
In turn, they are often eager to understand how restructuring will affect the operation of the plants they regulate. Because such consultations do not occur as a matter of course in most states, commissions would be well advised to seek out and establish an ongoing dialog with their environmental regulators around restructuring issues. These conversations are likely to reveal that the best decisions for the environment are often the best economic decisions as well. In states that adopt retail competition, regulators set prices for electric service for customers who do not choose their own provider, or who default from a competitive provider. This type of service is sometimes called provider of last resort, standard service, basic service or just default service.