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Regulators and Regulated: Too Cozy?

Monday, Aug. 15, 2011

In a story picked up by USA Today, the Indianapolis Star reports on Indiana's top utility regulator's possibly over-friendly relationship with Duke Energy.

Reporter John Russell consulted with Center Senior Fellow in Government Ethics Judy Nadler, who commented:


"It's really inappropriate for a regulator to get involved in personnel decisions with a utility," said Judy Nadler, a senior fellow in government ethics at the Markkula Center for Applied Ethics at Santa Clara University in California, and the former mayor of Santa Clara, who frequently dealt with regulators concerning the city's electric utility, Silicon Valley Power.

She said regulators should always keep a professional distance from utilities, and any conversation about personnel decisions could raise concerns of favoritism and back-scratching. For example, a utility that receives a note from a regulator pushing a candidate for a job might feel pressured to go along for fear of antagonizing the regulator. On the other hand, a utility that goes along with such a recommendation might expect to get favors in return.