Return on equity and the cost of capital to utilities

Journal Article · Wed Nov 30 23:00:00 EST 1983 · Public Util. Fortn.; (United States)

OSTI ID:5241927

Tiemann, T K; McGuire, S E

Utility regulators are faced with an important policy decision: will a higher rate of return to stockholders minimize the overall cost of utility service in the long run. Several writers have recently challenged traditional regulatory practice and advanced new ideas about minimizing the overall cost of capital to utilities through higher returns on equity. This article reviews those challenges and employs an empirical example to test whether the lowest total cost of capital occurs at rates of return on equity equal to opportunity cost, or at somewhat higher, more profitable rates. 6 references, 2 figures, 1 table.

• Research Organization: Wabash Coll., Crawfordsville, IN
• OSTI ID: 5241927
• Journal Information: Public Util. Fortn.; (United States), Journal Name: Public Util. Fortn.; (United States) Vol. 112:13; ISSN PUFNA
• Country of Publication: United States
• Language: English

Related Subjects

29 ENERGY PLANNING, POLICY, AND ECONOMY
290200 -- Energy Planning & Policy-- Economics & Sociology
296000* -- Energy Planning & Policy-- Electric Power
CAPITALIZED COST
COST
ECONOMIC ANALYSIS
ECONOMICS
ELECTRIC UTILITIES
FINANCING
INVESTMENT
PUBLIC UTILITIES
REGULATIONS