When the Exception Becomes the Rule: Regulatory Equity and the Formulation of Energy Policy Through an Exceptions Process

Regulatory programs exacerbate the inherent conflict between the values associated with rules and with equity. This conflict is especially acute in programs, like petroleum price and allocation regulation, that regulate complex transactions between diverse firms in a volatile market. Professor Schuck examines one technique for achieving regulatory equity-an exceptions process-in that context. After exploring the different limitations of rules and the relationship between regulatory equity and related concepts, including discretion, judicial equity and agency adjudication, Professor Schuck presents four detailed case studies of the exceptions process in petroleum regulation.

He demonstrates that the exceptions process did enhance regulatory equity in that program but also jeopardized important administrative law values.