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States are the Game

In the pages that follow, we hear from some of the most powerful voices of our day about the present and future days of power. The chairs of eight of the state utility commissions. And the chair of NARUC’s electricity committee. And the chief exec of public power’s association. And our panel of sixteen senior leaders, their confidential unabashed views in full view. And several hundred of you, via the twelve-question survey you completed. And a dozen thinkers at Navigant, each briefly addressing an issue about our future and present.

You cannot be surprised to hear me say that the past should get its due here too. Prognosticators of the future famously whiff more than they connect as is evident with the benefit of hindsight. Take it from me. I started my career helping the Carter Administration transition the power industry from natural gas to the fuel of the future — coal…

Which reminds me of Game of the States, one of the popular board games of the mid-twentieth century. Only the oldest readers will remember sitting outside on the sidewalk in the summertime sparring with cousins or friends on the board of states, transporting states’ principal products with your miniature plastic long-haul truck.

The game board listed detail on each state. Its nickname, population, capitol, date first settled, date admitted to the union, and notably its principal products – oranges for Florida, autos for Michigan, oil for Texas, cheese for Wisconsin, movies for California, and so forth.

Way before Dungeons & Dragons, Pac Man, Super Mario, Sim City, Pokémon, Grand Theft Auto and Call of Duty, Game of the States was a great way to spend a lazy hour. But the game developers — characteristically for that unique time in our history – quite intentionally made it educational as well. A tincture of civics. And a taste of the world of commerce.

An impressionable seven-year-old learned the states are really different. Also, that their diversity was real interesting. This was all good preparation for a career in utility regulation and policy.

Because when we assess the present state of power, and when we project the future, we know the states are really different. We know their diversity is real interesting. The electricity industry of the four new states — Hampshire, Jersey, Mexico and York — are on a variety of paths distinct from each other. And the four norths and souths — the Carolinas and Dakotas — have their own paths. California? What can we say? Its path is one of a kind.

Of course, the paths of power in states have some things in common. FERC governs across the wholesale world in all the states. Well, all but Texas. And, what is wholesale, and what is not, is a question for the ages.

We’re all digitizing. That’s true whether we’re in Wyoming, or in Washington, or in Wisconsin. And customers increasingly want clean and control in their electricity. That’s clearly the case in Massachusetts. But it’s as much the case in Missouri.

Yet, when one projects power’s progress, one must take into account the political, cultural, economic, regulatory and resource differences between the states. Iowa is windy, full of wind power farms. Pennsylvania is gassy, full of natural gas producers. One leans towards traditional regulation, the other towards nontraditional competition. Perhaps forecasters need to give us an Iowa projection and a Pennsylvania one.

Texas is ever hungry to accelerate economic growth. The Lone Star believes this requires minimizing electric rates through competition. The Empire State, New York, wants low rates too, but has a lot of other goals too. So, forecasters, give us a Texas projection and a New York one.

You gain in Game of the States when you transport the principal product of one state to benefit another. Utility regulation and policy is like that in a way. It progresses the most when we take the best ideas from one state and use them in another.

 Or maybe utility regulation and policy is like Monopoly instead of Game of the States. In Monopoly, you can buy the electric company if you land on its spot on the board. It’s just past St. Charles Place. And just before, guess what? States Avenue.

The electric company is a pretty good buy in Monopoly. But owning it is not nearly as profitable as other properties in the game, like Marvin Gardens or Pennsylvania Avenue or Boardwalk.

See a list of these articles here.

 

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Steve Mitnick, Editor-in-Chief, Public Utilities Fortnightly, and President, Lines Up, Inc.

E-mail me: mitnick@fortnightly.com