Regulation of utility power companies Essay

            Well planned regulations are always flexible hence they give companies the leeway on how to meet the required goals. It sets ambitious goals that tend to stretch companies beyond the present practices and gives them time to deploy new ways to meet the goals. However, there are positive as well as negative effects of bylaw for utility companies. The regulations broaden the firms to go further than what they are doing presently. Well designed regulations provide incentives for improvement and give the companies time to develop and implement new technologies. In some instances, these particular regulations do not give firms adequate decision making flexibility (William, 1983).

            The Public Utility Regulatory Policies Act of 1978 represented an effort by the federal government to affect the manner in which the state community utility commissions regulates the retail sales of electric as well as gas utility companies. On the other hand, the act establishes a wide range of requirements together with the procedures for state public utility commissions to follow in establishing retail rates. As a final point, the act includes provisions for the establishment of small hydroelectric projects and resolution of the problems associated with the expansion of crude oil transportation systems. It is also involved in grant for a utility regulatory institute and coal research laboratories as well as the emergency conversion of use of natural gas to other fuels (William, 1983).

            The main goal of EPA act 2005 was to establish a renewable fuels standard which tends to mandate the use of renewable fuels and ethanol in gas. Immediately after the 2005 act, ethanol was largely used in gasoline to meet a minimum oxygenate requirement for RFG.

            The Federal Energy Regulatory Commission (FERC) has full responsibility of deliberating the licensure of a hydropower project, purposely to consider all the aspects of the public interest and to license only those projects that are consistent with the best comprehensive use of the waterway. The most universal issues that FERC consider in its ecological impact credentials for hydropower projects comprise recreation, water quality, aesthetics and quantity, fisheries, soils, geology, vegetation and wildlife, chronological and archeological resources.

            The purpose of FERC Orders 888 as well as 889 was to provide the broad guidelines for reforming the U.S power industry. Order 888 mandated the unbundling of electrical services plus the separation of functions of marketing for the newly disaggregated services that required utilities to provide open way into their energy rate schedules. This order gave existing utilities that might have made a considerable investment based on older policy the right to improve their stranded costs from energy customers. Order 889 set the values concerning the information that utilities have to make accessible to the market place and create OASI, an official statement board system for sharing the information. The order 889 prohibits utilities from sharing the market information in any way that prevents access to this particular information by possible competitors (William, 1983).

            Independent System Operator (ISO) directs, monitors and controls the act of the electrical power scheme; typically in a solitary US State and it sometimes encompass multiple states. Independent System Operator also tends to act as a marketplace in wholesale power more especially ever since the electricity market deregulation of the late 1990s. The majority are set up like nonprofit corporations which are using supremacy models developed by FERC.


William, T. (1983). The Politics of Public Utility Regulation. California: Pittsburgh Printing        Press.