Politics of regulation
Thesis/Dissertation
·
OSTI ID:7253644
The rate of return allowed on the equity capital of a public utility is determined by the public utility commission(s) under whose jurisdiction the utility operates. All fifty states within the United States of America have commissions that are either directly elected or are appointed by elected officials. The determination of utility rate structures and rates of return on equity capital is therefore a political process in which consumers view with producers for wealth allocation that results from the rate-making decision. Regulation has been perceived as being designed and operated primarily for the benefit of the regulated industry. After reviewing the legal and economic environment surrounding the regulation of public utilities, a model is derived within a political framework which views the regulator as being captured by the special-interest groups of utilities. Results of the empirical analysis show that regulation is strongly influenced by political factors. Determination of rates of return for regulated utilities is a competition between opposing special-interest groups and must be viewed as much from that perspective as from the traditional financial viewpoint.
- Research Organization:
- Texas Univ., Austin (USA)
- OSTI ID:
- 7253644
- Country of Publication:
- United States
- Language:
- English
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