rate of return regulation

rate of return regulation

the control of a firm's or industry's level of profitability by the stipulation of maximum-permitted RATES OF RETURN ON CAPITAL EMPLOYED or investment. Such regulation is undertaken by government agencies to prevent the charging of ‘excessive’ prices by private sector monopolies and public utilities. See COMPETITION POLICY.
References in periodicals archive ?
Under his leadership the FCC also rewrote how the agency would regulate telecommunications prices, effectively bringing to an end decades of rate of return regulation and instituting price capping, which had been pioneered in the U.
Myers has published important research papers on many topics, including adjusted present value, rate of return regulation, pricing and capital allocation in insurance, and information issues in capital structure decisions.
A rate regulation regime gives all customers full access to network facilities (common carrier) at regulated rates--generally, rate base rate of return regulation.
Rate of return regulation would have a straight horizontal line in this figure.
Investor owned utilities have been governed by rate of return regulation and have lower rates than the municipal systems.
marginal cost pricing, average cost pricing, Ramsey pricing rule, rate of return regulation and price caps.
1) Nelson (1984) examined the impact of regulation on technical change in the electric utility industry, an industry subject to rate of return regulation.
Rate of return regulation is used by commissions and, thus, the "fairness" of returns has often been the emphasis of regulation (Crew and Kleindorfer, 1979).
There is a widespread belief that rate of return regulation is no longer the appropriate means of curbing overall abuse of market power by the incumbent local exchange providers.
Price caps would replace the current rate of return regulation.
Specifically, the FCC has decided to replace its current rate of return regulation by an approach based on price caps.
At that time, CT moved from rate of return regulation to a price cap form of regulation.