The power sector should better engage participants to ensure reliable and affordable electricity.
Regulated electricity markets are governed by policy systems that rely on specialized technical and financial information. Decisions made within them are capital-intensive, with lasting effects on system operations and consumer outcomes.
Recent polling found that 71 percent of residential consumers believe that their state does not do a good job protecting their interests in utility regulatory decisions. Research also finds that broadening participation within electricity regulation could improve accountability and responsiveness to public preferences while enhancing legitimacy and procedural fairness. Research spanning over half a century offers a basis for the benefits of broad participation in governance. Bringing new participants into the policymaking process shifts how policymaking systems prioritize issues, and new participants introduce competing information and problem definitions that can disrupt entrenched monopolies.
Yet processes involving competing interests can also produce delays or outcomes shaped disproportionately by the most vocal or well-resourced groups rather than long-term public interests. Over a quarter of residential customers are unsure what kind of utility they have. This is a prerequisite to following, let alone participating in, regulatory proceedings and presents a challenge when fundamental utility structures are misunderstood. These awareness gaps suggest that the quality of participation depends both on how customers are informed about proceedings and utility structures and on how opportunities for participation are designed.
How participation is structured in energy markets matters for consumer-friendly, responsive outcomes. Expanding participation works best when institutions are built to elevate relevant expertise and afford resources to under-represented stakeholders rather than amplify the most resource-rich. Participation works worst when it becomes a formality, a venue for delay, or a substitute for genuine engagement with consumer needs.
The opportunities for participation in electricity regulation vary by state. Municipal utilities are governed by local boards, cooperatives by member-elected boards, and public entities by government-appointed boards. Investor-owned utilities are governed by public utility commissions, responsible for setting rates and regulating utilities in the public interest.
For customers served by state-regulated investor-owned utilities—72 percent nationally—how commissions are constituted and how proceedings operate matters for outcomes. Research suggests that utility commissioners who are directly elected—as occurs in 10 states—are more responsive to consumer interests than appointed ones, adjusting decisions in ways more sensitive to consumer costs when inflation rises and citizen complaints increase. Electoral accountability can serve as a recurring check on public utility commissions. Elected commissions require public awareness for effective elections and are not immune to industry influence, particularly through campaign donations to public utility commission candidates. Appointed commissioners, by contrast, remain accountable through the elected officials who select them, but some states have multiple officials that appoint different members. Both participate in public forums such as rate case proceedings and integrated resource plan dockets that provide formal opportunities for stakeholder input across governance types. Both systems have their own complexities; the selection method is just one piece of a complex regulatory machine.
Citizen intervenors representing consumer interests, such as non-profit and community organizations, shape regulatory outcomes by introducing additional information and perspectives. Institutional design features can democratize participation and produce regulatory outcomes that better align with the public interest than the preferences of utilities. Consider dedicated consumer advocate offices: Correlational evidence shows that public utility commissions in states with such advocates authorize returns on equity equivalent to a 3.7 percent reduction in average utility income relative to states without them.
Even in states with active consumer advocates, however, commissioners have been found more attentive to utility executives than to citizen intervenors, and responsiveness at the agenda-setting stage does not necessarily carry through to policy decisions. Nor do the shifts from broader participation always benefit consumers: Retail restructuring in some states exposed residential customers to predatory pricing and higher costs than default service.
Additional actors can also create veto points that produce project delays or cancellations—classic “not-in-my-backyardism,” though this can be a positive outcome when a project is a poor fit. Opposition to the Energy Permitting and Reform Act reflected both environmentalists’ concerns and resistance from utilities seeking to limit competition. Highly engaged individuals can cause similar unnecessary delays at the state and local levels.
With these caveats, we argue that structural reforms—specifically the addition of more formal avenues for civil society and expert participation—can produce more consumer-friendly and responsive outcomes when they are well-designed. Thus, it is worth asking: Is your state utility commission, local board, or regional grid operator set up for accessible and meaningful participation?
Our dashboard of metrics on policies, programs, market characteristics, and participatory openings across the southeast offers one way to begin answering this for that region. The goal should not be participation for participation’s sake. States should focus on designing institutions that encourage consequential and informed participation without serving as either a rubber stamp or a tool for unnecessary delay. Three considerations can help.
First, states should consider sending direct notices to consumers of rate cases—requests by utilities for permission to raise rates—if they are not already. A basic precondition for public awareness and participation in the regulatory process is adequate notification. Consumers cannot participate in proceedings they do not know are happening. States vary in how they require utilities to inform customers of pending rate cases. For example, some states such as North Carolina require direct mailings to affected customers, while Arkansas and Ohio require only newspaper postings in areas of substantial circulation—considerably less effective in an era of declining circulation.
Second, high-quality information on public preferences matters. Independent actors such as university public opinion labs should regularly assess attitudes toward utility regulation, including whether residents are aware of ongoing rate cases, how they perceive utility performance, and whether they believe that their interests are represented. Regular independent polling would measure whether regulatory processes are responsive and inform efforts to educate consumers about their provider and the regulatory process.
Finally, states should evaluate resource allocation to public staff and consumer advocate offices and consider funding intervenor-compensation programs that offset the costs of participating for under-resourced groups. This supports constituencies such as low-income households, which are heavily exposed to the consequences of regulatory decisions. Intervenor compensation, already adopted in several states, makes non-utility expert participation financially viable for organizations that represent them.
A power sector that balances meaningful influence across participants is better positioned to deliver reliable and affordable electricity than one that concentrates authority or relies on ad hoc engagement.
