
Risk Principles for Public Utility Regulators
Michigan State University Press
Published on 1. May 2016
Book
Paperback/Softback
141 pages
978-1-61186-205-8 (ISBN)
Description
Risk and risk allocation have always been central issues in public utility regulation. Unfortunately, the term "risk" can easily be misrepresented and misinterpreted, especially when disconnected from long-standing principles of corporate finance.
This book provides those in the regulatory policy community with a basic theoretical and practical grounding in risk as it relates specifically to economic regulation in order to focus and elevate discourse about risk in the utility sector in the contemporary context of economic, technological, and regulatory change. This is not a "how-to" book with regard to calculating risks and returns but rather a resource that aims to improve understanding of the nature of risk. It draws from the fields of corporate finance, behavioral finance, and decision theory as well as the broader legal and economic theories that undergird institutional economics and the economic regulatory paradigm.
We exist in a world of scarce resources and abundant uncertainties, the combination of which can exacerbate and distort our sense of risk. Although there is understandable impulse to reduce risk, attempts to mitigate may be as likely to shift risk, and some measures might actually increase risk exposure. Many of the concepts explored here apply not just to financial decisions, such as those by utility investors, but also to regulatory and utility decision-making in general.
This book provides those in the regulatory policy community with a basic theoretical and practical grounding in risk as it relates specifically to economic regulation in order to focus and elevate discourse about risk in the utility sector in the contemporary context of economic, technological, and regulatory change. This is not a "how-to" book with regard to calculating risks and returns but rather a resource that aims to improve understanding of the nature of risk. It draws from the fields of corporate finance, behavioral finance, and decision theory as well as the broader legal and economic theories that undergird institutional economics and the economic regulatory paradigm.
We exist in a world of scarce resources and abundant uncertainties, the combination of which can exacerbate and distort our sense of risk. Although there is understandable impulse to reduce risk, attempts to mitigate may be as likely to shift risk, and some measures might actually increase risk exposure. Many of the concepts explored here apply not just to financial decisions, such as those by utility investors, but also to regulatory and utility decision-making in general.
More details
Series
Language
English
Place of publication
East Lansing, MI
United States
Target group
Professional and scholarly
Product notice
Paperback (trade)
Unsewn / adhesive bound
Illustrations
18
Dimensions
Height: 226 mm
Width: 150 mm
Thickness: 13 mm
Weight
227 gr
ISBN-13
978-1-61186-205-8 (9781611862058)
Copyright in bibliographic data and cover images is held by Nielsen Book Services Limited or by the publishers or by their respective licensors: all rights reserved.
Schweitzer Classification
Persons
Janice A. Beecher has served as director of the Institute of Public Utilities at Michigan State University since 2002.
Steven G. Kihm is principal and chief economist of Seventhwave and a senior fellow at the Institute of Public Utilities at Michigan State University.
Steven G. Kihm is principal and chief economist of Seventhwave and a senior fellow at the Institute of Public Utilities at Michigan State University.
Content
Contents
Acknowledgments
Introduction
Risk Principles
Appendix 1. Beta Coefficients for Selected Regulated, Formerly Regulated, and Related Market Sectors (2015)
Appendix 2. Key Court Decisions Regarding Risk
Glossary
Notes
References
Acknowledgments
Introduction
Risk Principles
Appendix 1. Beta Coefficients for Selected Regulated, Formerly Regulated, and Related Market Sectors (2015)
Appendix 2. Key Court Decisions Regarding Risk
Glossary
Notes
References