Public Utility Regulation: The Economic and Social Control of Industry (Recent Economic Thought, 17)

David B. Smith This is a book about the application of economic theory to a unique form of social control - public utility regulation. A central theme of this work is to examine the role that economics has played in shaping the rationale and direction of regulatory practices. While economic theory has played an important role in the shaping of regulatory policy in the past, it has an even greater potential role to play in the future as the regulatory community grapples with the many challenges of a changing economic environment. This is a very timely and much needed piece of work that can serve as a reference for decision makers who are facing the challeng­ ing problems of deregulation and competition. This work is comprised of 13 selected articles that guide the reader from an initial discussion of why we decided to regulate certain industries in the first place to a specific analysis of what role economic theory has played in the electric, natural gas, telecommunications, and water indus­ tries, and whether it should be allowed to play an even more dominant role in the future. The reader is then provided with a more modern version of what economists mean by the concept of natural monopoly and a menu of policy options that will allow society to derive any benefits from such a market structure. Front Matter....Pages i-xi Introduction....Pages 1-7 The Economics of Public Utility Regulation: An Overview....Pages 9-27 Commentary by William M. Dugger....Pages 28-34 Pricing and the Electric Utility Industry....Pages 35-77 Commentary by John Wenders....Pages 78-91 Telecommunications Regulation — The Continuing Dilemma....Pages 93-130 Commentary by Basil L. Copeland, Jr.....Pages 131-136 Natural Gas Pipelines and Monopoly....Pages 137-154 Commentary by W. W. Sharkey....Pages 155-162 Urban Water Supply: The Divergence Between Theory and Practice....Pages 163-178 Commentary by Alfred L. Parker....Pages 179-184 Natural Monopoly Measures and Regulatory Policy....Pages 185-216 Commentary by Ronald R. Braeutigam....Pages 217-222 The Contribution of Economic Theory to the Regulatory Process: Strengths, Weaknesses, and Future Directions....Pages 223-238 Back Matter....Pages 239-243