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    After-the-Fact Regulatory Review: Balancing Competing Concerns

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    07_9YaleJonReg107_1992_.pdf
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    Author
    Blank, Eric
    Pomerance, Stephen
    
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    URI
    http://hdl.handle.net/20.500.13051/8440
    Abstract
    In their article, Blackmon and Zeckhauser (B&Z) describe the problems associated with fragile regulatory commitments and their effect on utility investment. When utilities invest in capital-intensive plants which have long lead-times and little alternative use, these investments become sunk: utilities will leave them in place as long as recovery of their relatively low marginal operating costs is possible. Under certain conditions, this provides pro-consumer regulators with the opportunity to appropriate the benefits associated with the utility's investment for consumers.
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