Price Cap Regulation: A Case Study of Some Pitfalls of Implementation.
There has been considerable discussion of price-cap regulation as an alternative to traditional rate-of-return regulation. This paper examines some of the practical pitfalls of price-cap regulation. First, a model of a terminating price cap is developed. Next, this model is used to propose some problems of implementation. These problems are evaluated in the context of a case study of the Tucson Electric Power Company, which faced a type of price cap for several years in the 1980s. Extensions of the specific case to more general lessons about price-cap regulation are considered. Copyright 1991 by Kluwer Academic Publishers
Year of publication: |
1991
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Authors: | Isaac, R Mark |
Published in: |
Journal of Regulatory Economics. - Springer. - Vol. 3.1991, 2, p. 193-210
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Publisher: |
Springer |
Saved in:
Saved in favorites
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