Regulatory reform for diversified public utilities: for better or for worse?

Article Abstract:

Public utilities are being subjected to regulatory processes that call for efficient production, economically beneficial pricing, economic viability and profitable diversification. These processes or objectives, however, should be attained whether the markets being served are competitive or non-competitive. Regulatory policy has previously emphasized rate of return regulation, an approach which is difficult to implement in noncompetitive markets. Price caps have been suggested as a viable alternative to rate of return regulation because it encourages firms to produce efficiently and diversify.

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Competition and regulation: the swing of the pendulum

Article Abstract:

The economic implications of competition, deregulation and re-regulation of industries are analyzed. Regulation and deregulation movements are a result of macro-economic factors. Inflation, increasing demand and economic growth are conditions in which deregulation and the encouragement of competition are called for. Deregulation, however, is said to be one of the causes for industry-wide failure, such as the savings and loans debacle and of the financial weakness of many airlines. Discussions of regulation can be improved if economic planning combined with antitrust measures are considered.

Competition (Economics), Deregulation

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Discussion of: 'Regulatory reform for diversified public utilities: for better or for worse?' by Ronald Braeutigam

Article Abstract:

Major issues on regulatory processes affecting public utilities are analyzed. The issues are regulatory reform, diversification and price caps. Regulatory reform can either be deregulation or reregulation, depending on the current public control being imposed on specific utility industries. The question of diversification should take into account the objectives of government regulators and the interests of utility firms wishing to diversify. Price caps are a viable alternative to rate of return regulation. Usage of price caps, however, pose problems which should be anticipated.

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