Regional Regulation: An Option in the Array of Regulatory Institutions for a Restructured Electricity Sector

Abstract:

Excerpt form the Introduction:
The regulatory framework for electricity in the United States has evolved in two tiers, on both
a horizontal and a vertical basis. Horizontally, the two tiers are de jure and voluntary, or de facto.
Vertically, of course, the two tiers are state and federal, subsets of the de jure tier. De jure regulation
has, as might be expected evolved along political or policy or even legal fiction boundary lines. The
voluntary regulatory scheme, perhaps best illustrated by the regional reliability councils, has tended
to evolve along market or physical characteristics and bear, with the possible exception of ERCOT,
at best, little resemblance to any political or jurisdictional boundaries Not surprisingly, as the
electricity market has evolved, the de facto regulatory system, in a geographic, perhaps even geo-
political sense, more accurately reflects the realities of the marketplace. Simply stated, the markets
evolving are neither state specific nor national in scope, rather they are, at one and the same time,
both regional and international.