State Regulation of Electric and Gas Utilities: Energy Policy Study. Volume 4

摘要

State regulation of electric and gas utilities is examined. The concept of natural monopoly is reviewed, and alternative approaches to the problem are examined, using current economic literature. Private monopoly, public ownership, and regulatory intervention are compared as the chief alternatives. Various forms of regulatory intervention are discussed, ranging from franchise auction through rate-of-return regulation. The latter approach is then examned in detail, discussing the Averch-Johnson effect, regulatory lag, and the impact on technological choice and development of new technology. Alternative price structures are examined and contrasted with the free market case of an unregulated monopolist. The main conclusion is that current regulatory intervention appears to be the least desirable of the alternatives in terms of efficiency of resource use, price, output, and distribution of consumer surplus. 9 figures, 9 tables. (ERA citation 05:025991)