The liberalization policies in the eighties and in the nineties governed the transition to market competition in the electricity sector of many countries. However, many of these markets experienced a wave of capacity-related regulatory reforms, driven by a growing concern regarding the capacity...

A considerable literature has extolled the virtues of transitioning away from rate-of-return regulation for infrastructure-intensive industries. I find that for a large-scale transmission network like the U.S. natural gas pipeline system, transmission capacity under rate-of-return regulation may...