The Government’s Regulatory Obligations to Public Utilities Franchise

Abstract

Under the public utilities franchise system, the executive branch may transfer the task of providing public utilities services for the common good to a private party. It should undertake to regulate and prevent the private party from pursuing its own interests to the detriment of public interest while discharging its duty under the public utilities franchise. Since any public interest must be enjoyed by all individuals, we can say that the obligations owed under administrative regulations aim at the ultimate goal of increasing individual welfare. In the public utilities franchise system, regulations of this kind can be divided into six different categories: maintaining and promoting necessary market competition, ensuring the continuity of public utilities services, ensuring non-discriminatory provision of public utilities services, ensuring the quality of public utilities services, ensuring reasonable charges for public utilities services, and ensuring the conservation of energy and protection of the environment while providing public utilities services. The absence of governmental regulation of the provision of public utilities and of reforms in such services in China has harmed both public interest and the rights and interests of consumers. Some of the problems caused include chaotic market access for public utilities, no guarantee of the sustainability of public utilities, the failure of the universality of public utilities, declining quality of public utilities, sharp rise in the prices of public utilities, insufficient regulations on the conservation of energy and environmental protection, and so on. In order to achieve the effective implementation of the administrative regulations and obligations therein with respect to public utilities and the maximization of public interest, the Chinese government should enhance its consciousness of regulating public utilities, improve the legal system to regulate public utilities, perfect the regulatory system for public utilities, and establish a system of liability to compensate for failures in regulation.

Keywords

public utility / franchise / administrative regulation / public interest / public-private partnerships / PPPs

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2019 Higher Education Press