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Stipulated settlements, the consumer advocate and utility regulation in Florida

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Abstract

US utility regulation is evolving. Negotiated or stipulated settlements have begun to replace or supplement litigation, but relatively little seems to be known about this practice. This paper presents evidence from Florida. During 1976–2002, 30% of earnings reviews were settled by stipulations involving the Office of Public Counsel but only 7% of company requests. The mean value of a rate reduction was eight times larger with a stipulation than without; the median value was more than 50 times larger. Over three quarters of the rate reductions associated with earnings reviews derived from these stipulations; excluding one exceptional case the proportion was 94%.

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Authors and Affiliations

  1. Judge Business School, University of Cambridge, Trumpington Street, Cambridge, CB2 1AG, UK

    Stephen Littlechild

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  1. Stephen Littlechild
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Correspondence to Stephen Littlechild.

Additional information

Sanford Berg and Paul Sotkevitz kindly briefed me on stipulations and introduced me to the Florida Public Service Commission. I am particularly indebted to Dale Mailhot of the Commission for explaining the regulatory processes, allowing me access to the database, and patiently clarifying the details and background. I am grateful to Bonnie Davis, Jack Shreve and Scheff Wright for enlightening discussions in Tallahassie; to Dan Fessler and Steven Weissman for discussion of this topic in California; to Ashley Brown, Robert Burns, Joseph Doucet, Guy Holburn, Mark Jamison, Paul Joskow, Paul Sotkevitz, Pablo Spiller and James Wilson for related discussion and comments; and to two referees for helpful suggestions. I thank the Judge Business School and the TSEC grant to the Electricity Policy Research Group at Cambridge University for facilitating this research. None of the above is responsible for views expressed herein. Some outline results of the early research were given in Littlechild (2003). For more detail on the topics of this paper see the working paper Littlechild (2006).

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Littlechild, S. Stipulated settlements, the consumer advocate and utility regulation in Florida. J Regul Econ 35, 96–109 (2009). https://doi.org/10.1007/s11149-008-9071-2

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