It is common to assert that utility investors are compensated in the allowed rate of return for the risk of large disallowances, such as arise for investments found imprudent or not `used and useful'. However, this book develops a new theory of asymmetric regulatory risk that shows that infallible estimates of the cost of capital are sure to provide downward-biased estimates of the necessary allowed rates of return in the presence of such regulatory risks. The book uses the new theory of regulatory risk to understand recent developments in the risk of natural gas pipelines and other regulated industries.
- ISBN13 9781461364214
- Publish Date 30 September 2012 (first published 30 April 1993)
- Publish Status Active
- Publish Country US
- Imprint Springer-Verlag New York Inc.
- Edition Softcover reprint of the original 1st ed. 1993
- Format Paperback
- Pages 345
- Language English