EME 801
Energy Markets, Policy, and Regulation

Lesson 9 Overview


Lesson 9 Overview


We started the course with a discussion of how important energy is to the economy and the society. WIth such an important (some would say existential) dependence on reliable, affordable and safe energy, it is little wonder that the government might have something to say about how these important products and services are provided. There are some great books and even treatises that have been written by economists and attorneys on the regulation of the energy industry in the US and globally. This lesson will focus only on the United States because a global survey would be too broad for inclusion and because many of the lessons learned in the US will be applicable to the rest of the developed world.

Learning Outcomes

By the end of this lesson, you should be able to:

  • Discuss topics related to utility regulation in the US
  • Explain Rate Base/Rate of Return Regulation in a simple form
  • Identify the levels of regulatory jurisdiction
  • Explain where federal and state jurisdiction boundaries are drawn
  • Articulate the reason for the "Regulatory Construct"
  • List the most important Regulatory Cases in the past 150 years and discuss their importance
  • Develop the policy sensitivities section of your project

Reading Materials

  • Chapters 1 and 10 of Principles of Public Utility Rates by J. C. Bonbright
  • The first four entries of Penn State Extension's article, Electricity DeregulationWhy the Legislation? What is Deregulation? What Guidelines did PUC Set for Deregulation? and What is the Local utility Company's Role in Deregulation? 

  • Please watch the following interview with Frank Lacey (50 min.), which is borrowed from EME 897: Solar Energy Integration and Economics. If this video is slow to load here on this page, you can always access it and all course videos in the Media Gallery in Canvas. 
    Interview with F. Lacey by M. Kleinginna © Penn State is licensed under CC BY-NC-SA 4.0

What is due for Lesson 9?

This lesson will take us one week to complete. Please refer to the Course Calendar in Canvas for specific due dates. Specific directions and grading rubrics for assignment submissions can be found in the Lesson 9 module in Canvas.  

  • Complete Quiz 7
  • Project work - Policy Sensitivities


If you have any questions, please post them to our Questions? discussion forum (not email). I will not be reviewing these. I encourage you to work as a cohort in that space. If you do require assistance, please reach out to me directly after you have worked with your cohort --- I am always happy to get on a one-on-one call, or even better, with a group of you.