The Effect of "Fair Value" Rate Base Valuation in Electric Utility Regulation

Authors

H. Craig Petersen, Utah State UniversityFollow

Document Type

Article

Journal/Book Title/Conference

Journal of Finance

Volume

31

Issue

5

Publisher

Wiley-Blackwell

Publication Date

1976

First Page

1487

Last Page

1490

Abstract

Rate regulation of electric utilities in the United States is accomplished using a rate of return on capital limitation. The firm is allowed to charge rates which are designed to produce no more than some specified return on its capital. During the course of setting rates there are several intermediate steps. The commission must determine the proper or fair rate of return, the depreciated capital or rate base to which the allowed rate of return is to be applied, the firm's current revenues, revenues under proposed new rates, and allowable expenses.

Comments

Originally published by Wiley-Blackwell. Publisher's PDF and article fulltext available through remote link via JSTOR.

Recommended Citation

The Effect of Fair Value Rate Base Valuation in Electric Utility Regulation. 1976. Journal of Finance, December, pp. 1487-1490.