CERTIFICATION OF REGULATORY PROFESSIONALS: WHY NOT?
By Scott Hempling*
Accountants, architects, barbers, cosmetologists, crane operators, dentists, docking masters, doctors, electricians, engineers, foresters, home inspectors, interior designers, landscape architects, lawyers, land surveyors, pilots, plumbers, private detectives, real estate appraisers, real estate brokers, security systems technicians, security guards and tax preparers.
These are among the professions my state of Maryland certifies. Most states have similar lists. And missing from every state's list is "utility regulators." Having practiced within this field in multiple roles—as a hearing room litigant, appellate lawyer, commission advisor, opinion-drafter, legislation-drafter and expert witness—I am convinced that regulation can improve if it certifies its practitioners. North Carolina has taken its first step in this regard by creating a legal specialization for attorneys practicing utility law, an effort spearheaded by NCSEA. However, a series of questions still remain.
Certification has a market mission and a professional mission. In the marketplace, certification protects consumers from harm, while rewarding the qualified and penalizing the unqualified. In the professions, certification defines the profession's purpose, then establishes and upholds its standards. It answers the question, "What does it mean to be a good architect/accountant/doctor/lawyer?
These two missions, mutually reinforcing, apply equally to the regulatory profession. The purpose of regulation is performance: to induce excellence in the industries whose actors and actions we regulate. To induce excellence, regulators do three things: they set standards, apply those standards to actors and their actions, then assign consequences, positive and negative, by setting compensation and imposing penalties. For their decisions to be credible, regulators must earn trust: from the industry whose performance they judge, and from consumers whose welfare they protect.
Certification can help us earn that trust. It would act centripetally, pulling the profession—its commissioners and staff, utility executives and their employees, consultants and course providers—toward a central, common vision of excellence in industry performance.
What to Certify?
To know what to certify we must ask: In a regulatory professional, what characteristics and knowledge do we value? Of those characteristics and knowledge, which should we validate through certification? The answers then drive more practical questions: (1) Is there a core body of knowledge all regulatory professionals should have? (2) Is there also discipline-specific, industry-specific and subject-specific knowledge that professionals should master? Answering these questions then helps us decide whether and how to differentiate certification. For example:
Regulation-generic mastery: Certification would cover subjects all regulatory professionals should know, such as: the purposes of regulation; market structure; the different types of transactions and actions that trigger commission involvement; commission powers, structures and decision-making processes; and the principles that underlie each of the relevant professional disciplines.
Profession-specific mastery: Certification would be different for lawyers, economists, accountants, financial analysts, and engineers.
Industry-specific mastery: This certification would vary with each regulated industry: electricity, gas, telecommunications, water.
Subject matter mastery: Reliability, consumer protection, rate design, competition, hearing room procedures, competitive bidding, renewable energy, universal service, integrated resource planning, competitive bidding for generation, regional transmission organizations, audits.
Role mastery: The regulatory profession includes different roles: commissioners, commission advisors, litigation attorneys, expert witnesses, administrative law judges. Each role requires mastery of certain procedures and substantive topics.
Attendance vs. Achievement
To certify is to recognize achievement—to confirm that a person or entity has achieved some defined measure of expertise, knowledge or competence. A graduate school receives certification after objective experts monitor and review for curriculum, scholarship, teaching quality and student success. A lawyer, doctor, engineer or accountant receives certification after completing educational requirements at a certified school and taking one or more professional exams.
In the regulatory community we have dozens of conferences, seminars, professional meetings and continuing legal education. But only in rare cases, such as New Mexico State University's master’s degree program and the Society of Utility and Regulatory Financial Analysts' professional exam, do we certify achievement. In all other cases, attendees merely attend. But attendance is not achievement; exposure is not mastery. We need to certify not what chairs we have filled, but what material we have mastered.
Possible Certifying Entities
Certifying entities fall into three categories: academic, government and private.
Academic institutions certify acquisition of knowledge by granting degrees. The requirements vary widely by institution and subject matter.
Government bodies certify readiness to perform specific services that government has determined require certification, such as law, pharmacy, medicine, realty sales and engineering; even cosmetology, massage therapy and tattooing. In these situations, government rules prohibit noncertified persons from performing these services—or at least claiming to be certified when they are not. In the legal profession in North Carolina, certification beyond the general bar exam recognizes achievement in a particular field of law, allowing attorneys to become board certified specialists after peer review and examination.
Private organizations certify readiness to perform services where certification is not government-regulated. In these situations, a profession, through its organization, has determined that there is value to the public and to the service provider (in terms of market value) to create a certification process. Examples of such professions are financial planning, city planning, meeting management and religious ministry.
The three categories of certifying entities also reflect differences in the purpose of certification. Academic certification serves the purpose of upholding academic standards. Government certification furthers public policy goals of protecting consumers where there is great differential in knowledge between provider and consumer. Private sector certification focuses on practitioner skills, as a way of demonstrating to the public that skills matter in the quality of service. In contrast, noncertified professions—bicycle repair, baking, landscaping—depend on reputations created by good work and word of mouth, along with advertising.
Applying these concepts to utility regulation: The central value in certifying regulatory professionals is not that they meet "academic" requirements but that they meet practical requirements. This value suggests that the certifying entity should be an organization formed by regulators, perhaps advised by practitioners and academics.
Possible Certification Processes
Certification processes usually involve either/or (1) completing certain courses or curricula ("completing" meaning mastery, not mere attendance); and (2) passing a qualifying exam. Note the reference to "courses or curricula." Some certifications require a single course. Others require a multicourse curriculum. Some questions to consider:
- Could there be alternatives to the qualifying exam, such as publications, testimonies or cases argued?
- Is a qualifying exam sufficient, or should there also be an experience requirement? If so, should that experience requirement consist merely of years survived, or instead require specific activities or accomplishments, such as briefs written, witnesses examined, testimony offered?
- Should there be, in addition to the qualifying exam and experience, other requirements, such as: a published paper, oral interview conducted by regulatory professionals or some other contribution?
- Should certification be a one-time event? Or should there be required refreshers, like board-certified physicians have? Should there be opportunities for advanced certification?
- If the focus is to certify professionals, then is there a need to certify courses?
Common to all these questions is this foundational question: What types of mastery is certification seeking to produce?
Designing a Curriculum for Certification
Recognizing the many possibilities for a curriculum leading to certification, here are some opening thoughts.
I have defined an educated regulator as one who knows regulation's subject areas (market structure, pricing, quality of service, physical adequacy, financial structure, corporate structure), its legal sources (substantive law, constitutional law, administrative law), its professions (law, engineering, accounting, finance, economics, management), and its procedures (information gathering, decisionmaking, enforcement).
Dr. David Boyd, former Chairman of the Minnesota Public Utilities Commission (now head of regulatory affairs at Midcontinent Independent System Operator), has suggested a three-layered curriculum. The first layer, provided to regulatory professionals from all fields, would cover generic subjects. In the second layer, people would move into their separate professional disciplines to deepen their expertise. In the third layer, all the professionals would return to a common "capstone" course that would focus on advanced, frontier concepts. This approach would cause the participating professionals to become literate in each other's disciplines.
How might we organize the certification infrastructure—the goals, curriculum, educational materials, courses and qualifying exams? We would need teams of professionals—of practitioners, academics, staff and commissioners—somehow representative of the many interests affected by regulation, to bring insights, experience and passion to the process. And we would need a community-wide commitment to the mission: bringing to regulation the professional excellence the public expects and deserves. Why this community-wide commitment does not exist presently—why the profession and the public it serves seem satisfied with the absence of shared standards—is the subject of a future essay.
*A teacher, litigator, advisor and expert witness, Scott Hempling has assisted clients from all sectors in the electric industry. He has appeared before congressional committees, state commissions and state legislative committees; and addressed audiences throughout the United States and in Canada, Central America, Germany, India, Italy, Jamaica, Mexico, New Zealand and Nigeria. At Georgetown University Law Center, he teaches courses on public utility law and regulatory litigation. His Regulating Public Utility Performance: The Law of Market Structure, Pricing and Jurisdiction, published by the American Bar Association, has been described as a “comprehensive regulatory treatise [that] warrants comparison with Kahn and Phillips.” A companion volume will address the law of corporate structure, mergers and acquisitions. His Preside or Lead? The Attributes and Actions of Effective Regulators has been described as “matchless” and “timeless.” Hempling received a B.A. cum laude from Yale University in (1) Economics and Political Science and (2) Music, and a J.D. magna cum laude from Georgetown University Law Center.