Regulatory Transformation In The Empire State

"It is one of the happy incidents of the federal system that a single courageous State may, if its citizens choose, serve as a laboratory; and try novel social and economic experiments without risk to the rest of the country."

– U.S. Supreme Court Justice Louis Brandeis in New State Ice Co. v. Liebmann

Such an experiment is underway in the State of New York where, earlier this year, the New York Public Service Commission began proceedings to fundamentally reconsider the regulation of electricity utilities in the State.  These proceedings have the potential to shift the State away from the 'cost-of-service paradigm' that has governed electricity ratemaking for decades in favour of different incentives and could see the State moving incrementally towards a more decentralized system that is dominated by smaller "distributed" generation stations.  Because the issues raised in the proceedings are not unique to New York, it is expected that the proceedings will