Aleksandra Conevska (APRW)

Speaker & Title

Aleksandra Conevska, “Elected Versus Appointed Regulators and the Energy Transition"

Abstract

An established norm in the US is that political representatives are elected democratically. Yet notable exceptions exist. One example in the US are government regulators, including the public officials responsible for overseeing energy and electricity markets, where a plurality of selection methods are considered acceptable. Public Utility Commissioners (PUCs) are mostly appointed by other elected officials, though in ten states citizens elect them.  Existing work on regulator selection methods indicates that these differences give rise to regulators who make systematically different decisions, ultimately determining industry outcomes (Besley and Coate 2003, Leaver 2009, Lim and Yurukoglu 2018). This research centers on simple models of coalitional politics, where Besley and Coate (2003) theorize there are two types of voters with respect to regulatory issues: stakeholders in the regulated firms (pro-business interests) and stakeholders without a direct financial stake in the regulated industry (consumers). Applying this framework to PUCs, Besley and Coate (2003) theorize that regulators are either pro-business or pro-consumer, and they either price electricity and oversee public spending in a way that benefits consumers at the expense of businesses, or vice versa. I examine how selection methods affect regulator behavior in a more complex world where our economic systems must adjust to integrate sources of energy other than fossil fuels, even without climate concerns, because of growing energy demand and limits to the availability of affordable fossil fuels. This new world includes more complex coalitional politics, with a third key group: those with direct stakes in the economic transition. The third group can include stakeholders with financial interest in the economic transition, such as renewable energy firms, as well as stakeholders with intrinsic preferences for the transition, such as environmental NGOs and climate activists. In this new context, I ask: does electoral accountability give rise to regulators who are more or less likely to promote a long-term energy transition?