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Abstract: Incentive Regulation in Network Industries: Experience and Prospects in the U.S. Telecommunications, Electricity, and Natural Gas Industries
Abstract
Incentive Regulation in Network Industries: Experience and Prospects in the U.S. Telecommunications, Electricity, and Natural Gas Industries
The Review of Network Economics
Vol. 2, Issue 4 - December 2003, pp 316-337
Author
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Ross C. Hemphill
Christensen Associates
Mark E. Meitzen
Christensen Associates
E-mail: [email protected]
Philip E. Schoech
Christensen Associates |
Abstract
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We trace the development of incentive regulation in the U.S. telecommunications, electricity, and natural gas industries. Telecom has moved much more in the direction of pure price cap regulation. Incentive regulation in electricity and gas has generally not strayed far from rate-of-return regulation. Reasons for these differences include differences in regulatory commitment, industry concentration, technological change and productivity growth, service quality concerns, and externalities. We conclude that electricity and gas can evolve to purer forms of price caps as they gain more experience with incentive regulation, and if the unique features of these industries are considered in plan design.
Keywords: incentive regulation, telecommunications, electricity, natural gas, rate-of-return |
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