Regulatory Objectives

Regulatory commissions have goals-usually identified in the enabling legislation. Broad objectives include fairness, reasonable prices, network expansion, and service reliability. Specific goals might include: constraining market power (where prices are ‘too high’), avoiding prices that are ‘too low,’ providing suppliers with the opportunity to obtain adequate returns on investment (meeting the capital attraction standard), promoting cost containment (production efficiency), creating incentives for optimal quality, and encouraging entry where efficient.