Ensuring the “public good” has been a central regulatory goal since the US Supreme Court decided Munn v. Illinois in 1876, a case in which the court determined that grain elevators — because of their key role in the ability of farmers to get their goods to market — were affected with the “public interest.” Today, nearly a century and a half later, we are in the middle of a global pandemic with a power sector that is in transition, but which carries a promise of significant benefits to public health, consumers and our state economies.
The purpose of the following discussion is to take a fresh look at the public good, this deceptively simple idea, in order to help utility regulators in their exceedingly complex and demanding work. It is not to explore new responsibilities for utility regulators. Nor is it an entreaty for regulators to issue orders exceeding their existing authority. Our goal is for regulators to use their expertise to make a difference and better ensure the public good. What follows is intended to provide encouragement and a rationale for looking at existing regulatory authority with renewed vigor, and also a willingness to consider relevant demographic data to inform that effort.
This look at the public good will be broken into two parts. No surprise here, Part 1 of this series will look at the “public” part of the concept. What we mean by the “good” will be the focus of Part 2.
What We Are Learning About the Public
When we ask ourselves today about the “public” part of “public good,” it is impossible to ignore what we have learned about the effects of COVID-19 on the public since early spring 2020. Today the crisis set off by the pandemic affects every aspect of our lives — our personal safety and the safety of our loved ones and neighbors, our economy, and even our outlook for the future. It is almost overwhelming.
While at first these aspects of the public may not appear to have a direct connection with utility regulation, what follows is an effort to illustrate that the public is not a monolith. It is comprised of diverse communities with different strengths and vulnerabilities. Fully understanding the many people and groups that make up the “public” is more important than ever for utility regulators as they make decisions affecting the public good.
A little less than 40% of Americans identify as members of racial or ethnic minorities: In rough numbers, 18.1% as Latinx, 12.3% as Black, 5.5% as Asian, and about 0.7% as American Indian/Alaska Native (AIAN). The following two figures illustrate the effects of COVID-19 on the public and the disproportionate effects it has had on these subgroups of the public. Between February and June 2020, the rates of Black/African American and Latinx deaths, shown in Figure 1, are significantly higher than the rates for Americans who identify as white. In the case of ages 45-54, for example, Black and Latinx death rates are roughly six times higher than for white members of the public.
Comparable disproportionate effects of the pandemic have been documented for AIAN populations. As of May 2020, Native Americans are only 4% of Arizona’s population but account for 11% of the COVID-19 cases and 18% of the deaths. Similarly, they represent 9% of New Mexico’s population but 57% of the cases there, and in Wyoming only 2% of the population but 30% of the cases.
Recent research suggests one reason for disproportionate effects of the coronavirus on certain subsets of the public. Groups like African Americans experience higher rates of chronic illness which place them at greater risk when infected by COVID. For example, hypertension is experienced by over 40% of African Americans compared to less than 28% of white Americans. Nearly 17% of Black Americans suffer from diabetes, while that is the case for only 10% of white Americans.
Another reason for disproportionate effects of the coronavirus on certain subgroups of the public appears to be related to their long–term exposure to certain types of air pollution. In spring 2020, public health researchers issued a study in which they found a relationship between exposure to increased concentrations of fine particulate matter, or “PM2.5,” and increases in the COVID-19 death rates. Due to fuel combustion, cars, trucks, and buses are major contributors of PM2.5 and its precursor pollutants such as nitrogen oxides. According to the Union of Concerned Scientists (UCS), about three quarters of New York State’s African American, Latinx, and Asian American residents — roughly 6 million people — live in areas where PM2.5 concentrations from on-road transportation are above the state average. UCS also found that region’s most polluted census tract is in the Bronx, and is 270% higher than the state average.
The pandemic has also produced unemployment rates and disproportionately high unemployment rates, especially for groups identifying as non-white. Compared to unemployment rates for whites, in July 2020 rates for Asians were 30% higher. They were 40% higher for Latinx and 50% higher for Blacks.
|May 2020||July 2020|
When the May 2020 unemployment rates are broken out by gender, it shows that women of color experienced unemployment at a rate 33% to nearly 50% higher than their white counterparts. Likewise, for men of color the jobless rate was 30% to over 45% higher than that for white men.
|White Women||Black Women||Asian Women||Latinas
|White Men||Black Men||Asian Men||Latinos|
For some members of the public, economic disparities coincident with COVID effects do not end with health risks or unemployment. Housing type and employment type also appear to affect members of the public differently. For example, there are over 44 million renters in the United States, and one-quarter of them spend at least half their income on rent.
When we add job vulnerability to housing challenges, renters with economically vulnerable jobs — mining/oil and gas, transportation, employment services, travel arrangements, and the leisure and hospitality sectors — are even more at risk. They are more susceptible to income loss due to business closures, reduced hours, cancellations, and layoffs. A recent analysis found that 60% of households earning between $15,000 and $30,000 had at least one household member employed in a vulnerable occupation, while that was the case for only 28% of households earning over $150,000 per year.
What these snapshots of public health and economic data tell us is that the public is comprised of many different communities. These data also illustrate that certain members of the public are less equipped to deal with this cascade of pandemic-related effects than others.
Instead of being a monolith, the public is comprised of many diverse communities.
In more concrete terms: Some members of the public may not be able to afford access to the public health system that other members of the public enjoy. This makes those members of the public more susceptible to complications associated with chronic illnesses that they may already have that could, in turn, be compounded by COVID-19 infection. Some cannot afford not to work, even if their current job puts them at greater risk of exposure to the pandemic. This makes it difficult to look for other employment. Some may not be able to afford to move to an area that is less polluted or, if they cannot move away, even obtain better housing where they might be able to socially distance themselves from other members of their immediate family or extended household.
How Can Regulators Account for Some of these Differences?
As utility regulators make decisions, this information could be useful in helping to determine how well the public good is being served by utility programs and energy policies. Specific authorization is not necessary. Utility commissions already have supervisory and regulatory authority over utilities and their programs that enables regulators to seek greater detail as to the effectiveness of utility programs, and actual levels of participation across those communities. If a state is experiencing layoffs in its mining or gas and oil sector, for example, regulators could request additional information from utilities to help in determining the effectiveness of a utility’s program in meeting the needs of such vulnerable parts of the public.
On its own motion, the Michigan Public Service Commission (PSC) issued an order in Case No. U-20633 this summer in which it recognized “gaps in existing planning processes” and the need to identify “areas that could be improved.” The PSC indicated its need for more information about the public by directing staff to coordinate with state environmental regulators on the inclusion of “appropriate public health and environmental justice considerations in future IRP cases …”
In May, the Minnesota Public Utilities Commission (PUC) directed utilities to submit a report regarding investments they could make that would assist in Minnesota’s economic recovery from the pandemic. In addition to other conditions, the PUC indicated that it would be interested in seeing utility proposals that “use and document the use of woman, veteran, or minority-owned businesses as much as possible.”
States that already provide performance incentives to utilities could reflect on how utility program performance is currently measured. Is utility performance measured in kilowatt-hours, for example? Could program performance metrics be used to improve regulators’ and utilities’ understanding of the public by demonstrating that the program actually reaches “hard-to-reach” customers, and those customers likely to be disproportionately suffering effects of the pandemic?
In addition to utility commission decisions better reflecting various aspects of the public, we are learning that actual participation before utility commissions by all parts of the public can be a challenge. Not all members of the public can afford legal representation or the support of expert witnesses enabling them to engage like others before a utility commission. To address this challenge, utility commissions could consider making available intervenor funding or making recommendations to legislators who, in turn, could work to authorize it.
Where possible, commissions could also conduct the public’s business in a less formal manner. Recently, Commissioner Cliff Rechtschaffen of the California PUC observed that it would be valuable, where possible, for utility commissions to avoid formal processes and instead convene more accessible public meetings and workshops where interested parties can educate each other. PUCs could also take it upon themselves to communicate more effectively with the public by simply limiting jargon and acronyms, thereby helping those who are unfamiliar better understand the purposes of proceedings or policies.
Any of these efforts will improve understanding and help open lines of communication and make the exchange between utility commissions and members of the public more routine. This should help regulators form a more detailed sense of the public. It should also help utility regulators and members of the public realize how their lives and work are related and how they sometimes intertwine.
The public includes those of us who have for years driven on the busy highway past the power plant — and those of us who have lived next to that highway or in the shadow of that power plant.
Despite having the one word, “public,” we all have learned from the COVID-19 pandemic that the public is comprised of many segments, each with different strengths and weaknesses. The public includes those of us who have for years driven on the busy highway past the power plant — and those of us who have lived next to that highway or in the shadow of that power plant. The public is rural; it is urban; it may be more or less youthful; it may be limited or advantaged in different ways, economically, culturally and linguistically. But all these differences still fit under one caption: “the public.” The pandemic has taught us the value in understanding these distinctions. Where regulators make an effort to get to know the public, they are more likely to be able to ensure that their decisions promote the public good.