Autor: Scott Hempling

For 40 years, regulation has struggled with this question:  How do we bring effective competition to industries dominated for decades by government-protected monopolies?  The struggle persists, because no one loses his monopoly lightly:  not only in the traditional sectors—telephone service; natural gas transportation; and electricity generation, transmission, and retail services;— but in new areas like internet content and delivery, distribution-level electricity resources, and electric vehicle charging stations.  We want competition to produce diversity, yet the major players remain the same.  One reason:  We address only anticompetitive conduct while ignoring unearned advantage.  The competition that results is not competition on the…

Ciudad de México (Por Scott Hempling).- We have 50 sovereign states, five inhabited territories and 3.8 million square miles.  We have 320 million people and plenty of political differences.  Yet across this diverse and divisive land, from Maine to New Mexico to Washington to Florida, the principles and practices of utility regulation are held in common.  Why?  Here are nine possible answers—each one a lesson for our nation’s leaders. 1.- We don’t build walls. One of the 20th century’s greatest engineering achievements was the electrification of America.  See National Academy of Engineering, Great Achievements and Great Challenges.  Electrical interconnection made…

Ciudad de México, 21 de junio (Por SCOTT HEMPLING).– Reading these four books causes one to ask: Might the biases discovered by these intellectual eminences affect utility regulation? (I use “bias” not in the conventional sense of having a closed mind, or a predisposition to favor one side of a debate, but rather in the Thalerian sense of having a propensity to make decisions based on irrelevant factors). Among the many biastypes discovered by Kahneman, Tversky and Thaler, consider these three. Anchoring: Are decisions affected by irrelevancies? Experimenters rigged a wheel of fortune so that it always stopped on 10 or 65.…