Future costs of capital in the electric utility sector. Volume I. Background issues

Technical Report · Mon May 31 04:00:00 EDT 1982

OSTI ID:5206376

Decisions on future capital investments in the electric utility industry are highly dependent on the cost of capital to the industry. Interest payments on plant and facilities may constitute approximately half of the total costs of investment for the industry. Consequently an understanding of how these costs are perceived and estimated is of considerable importance not only to the industry itself, the financial community which serves the industry, and investors, but also to the Department of Energy's Energy Information Administration which is engaged in forecasting and analyzing the future behavior of the electric utility industry. This first of two volumes which examine the issue of the future cost of capital to the electric utility sector addresses a variety of the factors that affect the estimation of cost of capital. The formal relationships between electric utilities and their regulators and the impacts of regulations on the financial conditions, operations and planning of utilities are discussed. The pressures and impacts of inflation, escalating costs and environmental concerns are described. From this background material the cost of capital for electric utilities is determined. (LCL)

• Research Organization: Fiorello, Shaw and Associates, McLean, VA (USA)
• DOE Contract Number: AC01-80EI11975
• OSTI ID: 5206376
• Report Number(s): DOE/EIA/11975-T3-Vol.1; ON: DE82016803
• Country of Publication: United States
• Language: English

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CAPITAL
COST
ECONOMICS
ELECTRIC UTILITIES
FINANCING
INVESTMENT
PLANNING
PUBLIC UTILITIES
RATE STRUCTURE
REGULATIONS