NRRI 01-09 THE CONSUMER RESPONSE TO PUBLIC UTILITY COMPETITION


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By Francine Sevel, Ph. D.
Senior Consumer Affairs Policy Analyst

June 2001

This report discusses the response of the consumer to the changing
regulatory environment, as well as the impact of the environment on the role and
function of the state and federal public utility commissions, and the consumer
affairs departments within these commissions. Whereas other publications
address the consumer issues associated with competition from economic or
political perspectives, this report focuses on the consumer response to choice
programs. It details the skills that they have had to acquire in order to optimally
function in the new regulatory environment, the new relationships that they have
had to enter into, the transaction costs or "social costs" that they have had to
bear within the new regulatory environment, and the frustrations that they have
experienced.
The report also chronicles the impact of the consumer response on state
public utility commissions. Indeed, the structural and institutional changes that
earmark the new regulatory environment have forced state public utility
commissions to reexamine their relationships with consumers, utilities, billing
agents, federal utility commissions, other government agencies, and consumer
protection agencies. In doing so, it has forced them to reexamine the ways in
which they protect consumers, and in essence has forced them to reexamine
both their roles and responsibilities within the context of their consumer protection
mandate and the very essence of who they are. The report also discusses the
new skills that consumer affairs departments have had to add in order to do their
jobs effectively. As discussed in 1, in many cases, the consumer affairs
function has evolved from primarily a complaint-handing or intake function to one
which encompasses complaint-handling, consumer research, policy making/
policy enforcement, and consumer education.

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