Leveling the Analytical Playing Field for State Regulators
How a federal technical and talent hub could strengthen state energy affordability and deployment efforts
The Problem
State regulators are making increasingly complex, high-stakes decisions about the electricity system: The confluence of electricity demand from data centers, manufacturing, and electrification is driving utilities to propose major investments in infrastructure. Public Utility Commissions (PUCs) must evaluate these decisions while balancing state priorities and weighing reliability/affordability for ratepayers.
Public Utility Commission (PUC) analytical capacity has not kept pace: Many commissions have limited access to specialized expertise in modelling and forecasting analysis that allows them to make independent, informed decisions with public funds. The challenge is not simply the number of staff, but whether commissions have the expertise and tools to independently evaluate the sophisticated models and assumptions underlying utility proposals.
Utilities can have substantially greater analytical resources than the regulators overseeing them: Utilities and other stakeholders can invest heavily in proprietary consultants and models while PUCs may rely on utility-provided analysis or procure outside expertise on a case-by-case basis. Commission-retained consultants can provide valuable analysis but do not necessarily build durable institutional capacity.
The talent pipeline of people who are trained to work on public interest analysis—and want to—is limited: Even if all PUCs had the funding to support greater staff capacity, they would struggle to find experts to hire. There are too few people with the right expertise who are not already working for utilities or their consultants. Even when these experts are available, it can be difficult for individual commissions to compete with private sector employees on salary, work location, and benefits.
The Opportunity
Congress can build on existing DOE and national-laboratory technical assistance programs to create a pooled capacity hub for state regulators. The hub could provide (1) shared staff to rotate between commissions, (2) a prestigious brand and training program to attract new talent and build the pipeline, and (3) analytical firepower for PUCs to use for free. Existing programs, like the State Technical Assistance Program housed across four labs, demonstrate the value of connecting state regulators with national-laboratory expertise. A dedicated national resource could provide more sustained analytical support throughout major utility planning and regulatory cycles.
Policy Recommendation
Congress should establish a Modeling, Analysis, and Technical Talent for Energy Regulation Hub (MATTER Hub) within the Department of Energy (DOE). Administered by one or more national laboratories, the program would:
- Build a dedicated multidisciplinary surge team with expertise in ratemaking, resource planning, modeling, load forecasting, and the latest innovations in grid technologies and strategies (e.g., virtual power plants, alternative transmission technologies, surplus interconnection, etc.). Make the team available to detail to PUCs who need additional capacity to complement full-time PUC staff. Make compensation competitive with utility positions and utility consultants to attract strong talent.
- Develop and maintain shared analytical tools that commissions can use (either directly or with the help of the detailed surge members or national lab staff) to evaluate utility proposals, model alternatives, test assumptions, and conduct proactive work. Rather than requiring every commission to build its own modeling infrastructure, the federal resource could provide a shared analytical foundation.
- Build a talent pipeline by training new experts in utility oversight and ratemaking, providing a landing place for recent graduates to find a job in public interest utility regulation, and partnering with universities to increase awareness and interest.
- Strengthen state capacity over time by training PUC staff and facilitating peer learning among commissions.
The program would complement—not replace—permanent PUC staff and existing state and federal technical assistance programs, with DOE coordinating with NARUC and other groups to leverage existing capabilities and avoid duplication.
What Congress Should Do
Some good ideas for supporting PUC capacity are already swirling, including the newly introduced State Energy Oversight Act from Representative Tonko that would provide formula grants to state PUCs to expand commission capabilities and establish a DOE technical assistance program for PUCs.
In addition to formula funds and technical assistance, Congress should authorize and appropriate dedicated funding for DOE to establish a hub for shared resources and staff that PUCs can draw upon directly, including modeling capabilities and experts in key topic areas that can be seconded to PUCs for surge capacity. The hub could live at one or multiple national labs, perhaps Lawrence Berkeley National Laboratory, the National Lab of the Rockies, and the Pacific Northwest National Laboratory. Congress should provide approximately $30 million annually for five years to cover staff, tool development, and training. The program should include safeguards to ensure that assistance is provided at the direction of state commissions and remains independent of utilities and other parties.
Congress should establish a Modeling, Analysis, and Technical Talent for Energy Regulation Hub (MATTER Hub) within the Department of Energy (DOE).
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