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"The 'Optimal' Fair Rate of Return," Bell Journal of Economics and Management Science, Spring l97l.
We continue to expect utilities to serve their customers with low-cost power while earning a fair rate of return.
"We wouldn't invest if we didn't feel comfortable it would provide a fair rate of return," said John Tiliacos, managing director of onboard products for American Airlines.
Regulation of energy firms faces the complex problem of balancing private (earning a fair rate of return on investment) and public (assure safe and reliable supply of energy at the lowest possible costs) goals.
The measure would guarantee these aging facilities "a fair rate of return," regardless of whether they are able to compete with cheaper alternatives such as natural gas, wind, and solar.
The claim that a fair rate of return can be set by fiat, rather than the market, for an industry that is prone to booms and busts has obvious appeal elsewhere.
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A second element, which dates to the early 20th century, is rate-of-return regulation, limiting prices charged to customers on the basis of a fair return on investment.
2. Rate-of-Return Assumptions.
That means the government must guarantee that any subsidies for new power generation and any rate of return to suppliers are fair, and not overly generous at consumers' expense.
"The government must guarantee that any subsidies for new power generation and any rate of return to suppliers are fair, and not overly generous at consumers' expense," said the group's director of energy Audrey Gallacher.
The regulator should have the authority to set a regulated, overall rate of return that permits each SME to earn a "fair return" for its shareholders.
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