Every state (and Guam) has a governmental board regulating the public and private companies that distribute essential utility services: the Public Utility Commission (PUC) or the Public Service Commission (PSC). These bodies act as watchdogs, attempting to ensure efficient and equitable distribution, maintenance, and pricing of essential services. Given that these terms are synonyms, throughout this digest all commissions will be referred to as PUCs.
State PUCs are boards comprising three to seven members depending on the state, with the majority of PUCs consisting of three members. In 40 states, commissioners are appointed, generally by the state’s governor; these appointments are approved by the state legislature. In the remaining ten states, commissioners are publicly elected. The position of commissioner is largely a nonpartisan one, but officials in several states — Alabama, Arizona, Georgia, Illinois, Louisiana, Mississippi, Montana, Nebraska, North Dakota, Oklahoma, and South Dakota — declare a party membership. The majority of those with a declared party are Republicans and are in states where commissioners are publicly elected.
Note that state legislation governing requirements for PUCs and individual utilities vary. However, PUC activities intersect with buildings primarily with respect to their electricity regulation. In many states, utilities are required to submit periodic plans for review to their PUC, known as Integrated Resource Plans (IRPs). These plans span multiple years — depending on the state, five, ten, twenty, or more — and are lengthy documents outlining how a utility plans to manage its resources. For instance, how is the utility planning on expanding or shrinking service areas and services? Which substations and transmission lines need maintenance or overhauling? How will a utility facilitate grid connection for electric vehicle charging stations or renewable energy generation? These questions and more are addressed in draft IRPs, which often then undergo public review, a redrafting, and then submission to a PUC.
A common point of public contention within PUCs is how a utility plans to finance any changes. Generally, the projected billions in costs will be recouped via a rate increase for customers over a sustained period. PUCs must approve retail rate changes proposed by utilities. In recent years, this has almost exclusively been rate increases — in 2023, PUCs nationwide approved $10.3 billion in rate increases and $0.6 billion in rate decreases. Rate increases were driven largely by issues presented by climate change, like the need to harden infrastructure against extreme weather and capacity upgrades to prepare for increased electrification. This does not necessarily mean that PUCs are rubber-stamping massive rate increases, however. In 2023 and the first half of 2024, PUCs approved 58 percent of requested rate increases, indicating that utility rates would likely have soared even more if PUC oversight had been entirely removed.
PUCs can also provide an opportunity for electricity consumers to engage with the utility decision making process. PUCs typically hold open meetings and hear input from the general public. Although these meetings are often complex and require a schedule and level of understanding of the process that is difficult for those who are not regularly engaged in the process to decipher, PUCs do allow for democratic engagement with utility regulation.
While PUCs stand for consumer protection, the same political systems in place generating corruption and inequities across the rest of the government exist in PUCs as well. A prominent example is a case regarding the Georgia Public Service Commission, a case that the Supreme Court declined to hear in June 2024. Georgia is one of the ten states where its commissioners are elected publicly. Georgia splits itself into five PUC districts. While commissioners must reside in one of each of the five districts, each district’s election occurs statewide. The case revolved around a claim that Black voters’ ballots were “illegally diluted” via the preservation of a statewide election format — Black Georgians are concentrated in certain districts, but statewide the Black population is drowned out by the majority-white state population.
An amendment was proposed by a state senator so that commissioners may only be elected by the voters in their district. While a federal judge ruled in August 2022 that the statewide election does in fact dilute Black voting power, the federal appeals court ruled in November 2023 that the statewide elections may remain, as states should be able to determine their own method of election. With the Supreme Court’s decision to not hear the case, the appeals court’s decision stands and Black voting power remains diluted.
The voice of electricity customers is almost exclusively channeled through the decisions PUCs make. Utility bills impact us all, making the work that PUCs, and their respective commissioners, do in setting rates that building owners and occupants pay universally influential.
