Rate Structure Reform: A Review of the Current Debate
Regulation of utility rate structure, traditionally focusing on overall earnings and the concept that competition discourages efficiency, has recently shifted in response to new technological, economic, and legal issues. The author reviews recent controversies involving the electric and telecommunications industries and concludes that it is time to revise rate structures. The impetus for reform in the electric utility industry comes from a combination of factors that have emerged in public hearings and meetings, while technological innovations and institutional changes have influenced the movement for rate reform in the telecommunications industry. The costs of changing rate structures are noted, and the author warns that the benefits may not be as all-encompassing as reformists hope. 22 references.