Public Utility Regulation or Public Ownership

Abstract

In Parts One and Two we discussed some of the background theory of the economics of public utilities. Our main concern to this point has been to determine policies which are in the public interest as embodied in the traditional social-welfare function. The purpose of Part Three is to examine and compare some of the institutional arrangements surrounding public utility pricing and investment planning. In this chapter we review briefly some historical and legal background to public utilities, particularly in the U.S. and the U.K., focusing on some of the important issues that have arisen. In Chapter 9 we examine the major theoretical issues associated with public utility regulation in the U.S. and relate these to our earlier discussion of peak loads and stochastic demands.