Public Value Tensions for Dutch DSOs in Times of Energy Transition: A Legal Approach

Abstract

This paper centers around two concepts: public values and regulatory disconnection. It provides a study of the tensions Dutch DSOs encounter in their role as safe guarders of energy sector public values. The paper elaborates how these tensions can be traced back to current energy sector legislation not being able to keep up with the energy transition. DSOs have the statutory task of safeguarding public values (understood as “properties of utility services”), such as availability, affordability, and safety. They are expected to safeguard these public values in such a way that a certain balance between these values is maintained. Based on interviews with Dutch sector representatives and an expert panel survey, we show that DSOs do strive for a balance between public values, but that the energy transition makes achieving it more difficult. Three cases were selected where DSOs apparently struggle. The energy sector legislation DSOs have to comply with in these cases does not always account for the impact of the energy transition, thus constituting a regulatory disconnection. We find that DSOs often do not succeed in achieving a socially acceptable balance between public values, because legislation is preventing them from doing so. The discrepancy between the legislator’s and DSO’s intentions, and the DSO’s daily practice would suggest additional research into mechanisms that may facilitate DSOs in conducting a more explicit trade-off, which would produce a public value treatment that is sustainable in terms of social acceptance. This would help secure the energy transition its much needed public support.

Keywords: DSO, public values, energy transition, regulatory disconnection

JEL Classification: D10, D18, K23, K33, O33, O38, Q42, Q48