You asked for a discussion of how the Department of Public Utility Control's (DPUC) role has changed since deregulation and how its funding has changed.

DPUC regulates companies in the energy, telecommunications, and water industries. Historically, most of these companies were monopolies in their service territories. In the case of the electric and gas industries, the companies were vertically integrated. Gas companies bought gas for their customers, arranged for it to be shipped from gas fields, and distributed the gas in their service territories. Electric companies generated power, transmitted this power from power plants to substations, and distributed the power to individual homes and businesses.

DPUC historically regulated companies on a cost of service basis. Pursuant to CGS §§ 16-19 and 16-19b, DPUC set rates so that the companies were just able to recover their prudently incurred capital and operating costs, and make a reasonable rate of return on their investments. DPUC has also historically had a number of responsibilities in addition to regulating utility companies, such as overseeing the Call Before You Dig program, approving utility mergers, and determining whether a utility may sell property and if it does, who receives the profits from the sale.

Over the past two decades, the state and federal government have partially deregulated a number of the industries under the DPUC's jurisdiction. In the mid 1990s, the state and federal government opened much of the telecommunications industry to competition. Changes in federal law over the past 15 years, notably the Telecommunications Act of 1996, have sharply limited DPUC's ability to regulate cable TV rates, but DPUC continues to be responsible for awarding and renewing cable franchises.

In the late 1990s, the state opened the retail electric industry to competition, although the transmission and distribution functions remain subject to traditional cost of service regulation. In the case of natural gas, the federal government deregulated the wholesale industry, while Connecticut allowed retail commercial and industrial customers to choose their suppliers. Customers who choose competitive suppliers continue to use the gas utilities for distribution services. In contrast, water companies remain monopolies within their service territories, as do gas companies with regard to their residential customers. These companies are subject to rate regulation with regard to their services that are not subject to competition.

In light of these changes, DPUC has taken on several new roles. It grants certificates to competitive telecommunications companies, allowing them to enter the Connecticut market. There are currently over 120 competitive local exchange carriers in the state. Although these companies are required to file their tariffs to DPUC, they are not subject to traditional rate regulation. DPUC also licenses competitive suppliers in the electric industry and registers competitive gas suppliers. There are currently 18 electric and 13 gas suppliers.

DPUC has taken on several new roles with regard to the electric industry. Among other things, it oversees and approves (1) the electric company's procurement of power for customers who do not choose competitive suppliers; (2) the compliance of the electric companies and the competitive suppliers with the renewable portfolio standard, which requires them to get part of their power from renewable resources; and (3) the electric companies' conservation programs. DPUC is currently implementing PA 05-1, June Special Session, which established a wide range of initiatives to reduce federally mandated charges associated with congestion on the transmission system.

DPUC's budget has grown substantially while its responsibilities have evolved. In FY 1993, before the beginning of deregulation of the telecommunications industry, its budget was $ 5. 7 million. In FY 97, the year before the passage of legislation partially deregulating the electric industry, the budget was $ 7. 0 million. In FY 99, the budget had grown to $ 14 million. In FY 07, the budget is $ 19. 4 million. DPUC's staffing has remained fairly stable, increasing from 129 in FY 93 to 139 in FY 07. DPUC has made extensive use of consultants for several of its newer responsibilities, such as its oversight of the electric companies' powr procurement.

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