A principled approach to the stranded cost issue

Journal Article · Wed Apr 01 00:00:00 EST 1998 · Electricity Journal

DOI:https://doi.org/10.1016/S1040-6190(98)00020-7· OSTI ID:290020

Maloney, M T; Sauer, R D ^[1]

---

1. Clemson Univ., SC (United States)

The case against stranded cost recovery is a strong one, whether investments in generation were efficient ex ante or not. This is the unavoidable conclusion once the proper roles of the regulator, utilities, investors, and consumers in the regulatory system of the past century are clearly identified. It is improper and inefficient for government to sanction the mistakes of the private sector by taxing consumers in order to rescue producers. This is precisely what stranded cost recovery does. Denial of stranded cost recovery is consistent with the role of the regulator as a substitute for salutary market forces and, indeed, is required by it.

• OSTI ID: 290020
• Journal Information: Electricity Journal, Vol. 11, Issue 3; Other Information: PBD: Apr 1998
• Country of Publication: United States
• Language: English

Related Subjects

29 ENERGY PLANNING AND POLICY
PRICES
ELECTRIC POWER INDUSTRY
ELECTRIC UTILITIES
REGULATIONS
COMPETITION