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January 19, 2015 Editorial

PURA needs regulatory independence

Regulatory independence is a hallmark of any great system of checks and balances.

But Gov. Dannel P. Malloy doesn't necessarily think that applies to the state's top utility regulator, the Public Utilities Regulatory Authority. PURA's three commissioners issued a stinging 19-page memo last week calling for Malloy to grant them independence from the Department of Energy & Environmental Protection.

Under Malloy's direction, DEEP and PURA were created and folded into a single agency in 2011 to establish one energy department for the state. The move was controversial because it created an inherent conflict of interest by allowing the state agency responsible for developing energy policy to control the organization responsible for regulating that policy.

DEEP, for example, controls PURA's budget and is a party to nearly all cases PURA is responsible for adjudicating.

PURA commissioners are correct in asserting that this creates a conflict of interest, and the business community should support greater independence between the two organizations. The arrangement leaves PURA vulnerable to political influences, whether they exist or not. And businesses don't want to operate in a system where politicians play judge, jury, and executioner.

For his part, Malloy was steadfast in his own defense, arguing that PURA commissioners were only interested in empire-building.

During a press conference last Monday he told reporters that if the state was going to consolidate some of its bureaucratic largesse — something taxpayers and the business community have lobbied for — such combinations of agencies and overseers was necessary.

The other option, Malloy said, would be to allow organizations like PURA to hire whoever they want, whenever they want, adding to the cost of state government, and preserving the state's long history of independent fiefdoms. Malloy deserves credit for his efforts to consolidate agencies to cut down the cost of state government, but that really isn't the argument here.

If Malloy wants to play the money card, we aren't buying it. This isn't about more or less money for PURA. The commissioners don't need financial independence; they need decision-making independence.

The Connecticut Siting Council — a similar regulatory organization with more autonomy than PURA — has managed to stay independent without running up deficits. PURA could become independent of DEEP without costing the state extra money.

Forcing energy regulators to go to the state's main energy policymaker every time they need to make a personnel or budgetary decision is not good governance.

DEEP Commissioner Rob Klee and the three PURA commissioners might get along swimmingly now, and all of Klee's decisions on how PURA runs may be completely independent of his political views. Still, Klee won't always be DEEP's commissioner, and there will be new PURA commissioners before long. That is why Malloy should set up a proper system of checks and balances now, before the PURA-DEEP relationship sours and accusations of political gamesmanship plague the integrity of the state's regulatory oversight of the utilities industry.

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