CPUC chooses reregulation over deregulation

The California Public Utilities Commission (CPUC) moved a tortured step closer to deciding how it will reform its regulation of the state`s electric utilities when it adopted a Proposed Policy Decision in its proceeding on competition by a 3-to-1 vote on May 24. The Proposed Decision retreats from the free-market approach the CPUC took when it presented its `Blue Book` proposal in April 1994. Indeed, the Proposed Decision amounts to a tacit admission that the CPUC cannot accomplish the task of implementing competition, and begins a transfer of the task from regulators to legislatures. Competition will, thus, evolve more slowly than if the CPUC had followed the course envisioned by the Blue Book; however, the delay is unlikely to have much effect on the ultimate emergence of competition, which is driven by technological and economic forces beyond the control of regulators.