Rate-of-return Regulation and Efficiency: The Economics of the Natural Gas Pipeline and Distribution IndustryAn examination of how natural gas pipeline and distribution company efficiency may be affected by three policy instruments at the disposal of regulators. |
Contents
CAPITAL INVESTMENT RESTRICTIONS UNDER | 3 |
EMPIRICAL DISCUSSION | 6 |
IS NOT THE ONLY OBJECTIVE | 17 |
7 other sections not shown
Common terms and phrases
allowed rate assume assumption Averch-Johnson model B₁ capital investment capital productivity requirement chapter consumer price consumer surplus cost of capital cost of gas Cramer's rule drain on earnings Economic firm behavior gas firm greater than zero Hence homogeneous with non-decreasing hookup implies income effect increase in ẞ institutional costs isoutility curve marginal cost marginal drain marginal revenue product marginal social cost Mathematical Formulation maximize MDEG MDEH Natural Gas negative non-decreasing returns pipeline point of tangency profit and institutional Profit Figure profit-maximizing Proof Q.E.D. Lemma Q.E.D. Theorem rate of return rate-of-return constraint rate-of-return regulated firm ratio regulator would seek regulatory required capital productivity return constraint returns to scale Section slope space substitution effect supply projects underlying production function utility function values of g values of profit welfare-maximizing regulator wellhead price ceiling wellhead price controls x space X-inefficiency yields Z₁₁(k,g απ