In two recent special reports, Regulatory Research Associates, an offering of S&P Global Market Intelligence, provided an overview of the November 2016 election, including a preview of the gubernatorial and commissioner elections, presidential election, the presidential nominees' stances on energy issues, upcoming executive appointments, as well as interest rate commentary and a historical summary of ROEs going back to 1980.
Access links to the full reports at the bottom of the page.
Commissioners serving at 35 state-level utility regulatory agencies nationwide are selected by the state's governor; in the District of Columbia, commissioners are selected by the mayor; and the United States president selects the members of the Federal Energy Regulatory Commission. At 28 state agencies, the District of Columbia and FERC, the chief executive of the jurisdiction designates the chairman. Consequently, the outcome of the Nov. 8 general election could have a significant impact on the makeup of the agencies that regulate utilities. Utility regulators at seven agencies are selected through direct voter elections, while regulators in six jurisdictions are elected by districts. Such elections will also be held in many of these states on Nov. 8.
Gubernatorial elections will be held in 10 states in which the governor selects utility regulators. In Montana and North Dakota, gubernatorial elections will also take place, but the governors in these states do not appoint the commissioners.
Commissioner elections will be held in 11 states on Nov. 8, including Texas, for the Railroad Commission. Incumbent commissioners running in Alabama, Louisiana, Nebraska, New Mexico and Oklahoma, as well as candidates in Montana and Nebraska, are running unopposed and are considered the presumptive winners of their commissioner seats.
In addition to the gubernatorial and state commission elections, on Nov. 8, the U.S. will elect its 45th President and 115th Congress. In terms of the presidential election, nominee and former Secretary of State Hillary Clinton, a Democrat, as a career politician represents the establishment. Running as an outsider, Republican presidential nominee Donald Trump, a billionaire real estate mogul and celebrity, has no formal policy record or political experience.
Regardless of which candidate is victorious, the changes in leadership will undoubtedly bring changes in regulations and policies. However, odds are that Clinton's policies will be more consistent with those of the current administration than would Trump's. In terms of energy policy in the U.S., a Clinton win would likely mean increased regulation of fossil fuels and fracking and increased spending on renewable energy development. Clinton would likely preserve most of President Barack Obama's legacy with respect to energy, including the Clean Power Plan, or CPP. A Trump victory would bring less regulation, including the potential rescission or moderation of the CPP.
Of course, there is no guarantee that either candidate would be successful in fully implementing her/his agenda, as proposals by the newly elected president can be set back by unforeseen occurrences that may result in major initiatives being refocused or downsized.
Also, the newly elected Congress may have a different agenda, and the ultimate political make-up of Congress may color how that body receives the new president's initiatives. In 2016, 34 Senate seats and all 435 House seats are up for election. The outcome of these races could shift control of Congress from the Republicans to the Democrats. The elections could lead to several possible outcomes: Clinton wins the presidency with a Democratic Senate and Republican House; Trump wins the presidency, and the Senate and House remain under Republican control; or Clinton wins the presidency with a Democratic Senate and Democratic House.
Be it Clinton or Trump, the new president will bring a new administration and have the power to fill key positions, subject to Senate approval, at various regulatory bodies including FERC and the U.S. EPA. The next president will also have the power to nominate justices to the Supreme Court, and with the existing vacancy on the court, the new president could have the ability to shape the ideological balance of the court for decades. In addition, other key executive appointments that will fall under the new president's purview include the Board of Governors of the Federal Reserve and the Federal Reserve chair in 2018.
Read the full reports: