Stabilization theory, regulatory policy, and the investment preferences of utility shareholders
The strategic interests of electric utility shareholders and the policies of regulators are modeled as price-stabilization problems. Pervasive supply and demand uncertainties in the utility industry emphasize the need for stabilization. Consumers were the principal beneficiaries of stabilized prices in the 1970s. Shareholders have borne the cost of previous oil cost and demand variability. Consequently, they stand to benefit most from future stabilization actions by regulators. Three generic production strategies for utilities are examined to determined where the greatest stabilization value lies. These strategies are: traditional regulated supply projects, unregulated production, and utility conservation programs. Stabilization policies have their greatest value for unregulated production. Utility conservation programs are superior to traditional regulated supply projects provided that conservation ''output'' can be controlled. If utility conservation programs have a large unmanageable variability, they will cause shareholder losses. 33 references, 2 figures, 9 tables.
- Research Organization:
- Lawrence Berkeley Lab., CA
- OSTI ID:
- 7204869
- Journal Information:
- Energy Syst. Policy; (United States), Journal Name: Energy Syst. Policy; (United States) Vol. 8:3; ISSN ESYPB
- Country of Publication:
- United States
- Language:
- English
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Related Subjects
290200* -- Energy Planning & Policy-- Economics & Sociology
296000 -- Energy Planning & Policy-- Electric Power
ECONOMIC ANALYSIS
ECONOMICS
ELECTRIC UTILITIES
ENERGY CONSERVATION
INVESTMENT
POWER GENERATION
PUBLIC UTILITIES
REGULATIONS
STABILIZATION