Estimating the effect of regulatory accounting rules on rate-regulated firms

Thesis/Dissertation · Sat Jan 01 04:00:00 EST 1983

OSTI ID:5563169

Lanen, W N

This research represents an attempt to test empirically two sets of concerning the effect of alternative regulatory accounting rules on the regulated firm. The approach taken in the study was essentially to develop hypotheses using a simple model of the regulated firm and to test the hypotheses on a sample composed of fossil-fuel fired steam-electric generating plants that began operations during the period 1957 to 1965. The author starts with a simple model of a single-plant utility and characterizes the effect that the accounting treatment of deferred taxes has on selected financial results. This is then extended to a dynamic model which considers the firm's choices when faced with alternative rules. Because regulation, of the type considered here, essentially represents a constraint on the firm's actions, utilities operating in jurisdictions employing different rules may make different choices. This is tested by considering the production technologies used by firms using different accounting rules. It is shown that the accounting rule operates as a change in the effective allowed rate-of-return for the utility.

• OSTI ID: 5563169
• Country of Publication: United States
• Language: English

Related Subjects

29 ENERGY PLANNING, POLICY, AND ECONOMY
290200 -- Energy Planning & Policy-- Economics & Sociology
293000* -- Energy Planning & Policy-- Policy
Legislation
& Regulation
296000 -- Energy Planning & Policy-- Electric Power
ACCOUNTING
ECONOMIC IMPACT
ELECTRIC UTILITIES
INCOME
MATHEMATICAL MODELS
PUBLIC UTILITIES
REGULATIONS
TAXES