Regulator preferences and utility prices: evidence from natural gas distribution utilities

We investigate the determinants of regulators' relative weighting of the so cial welfare of customer groups and utilities using panel data on natural g as distribution utilities in the US state of Tennessee. In contrast to prev ious empirical work on cross-sections of electric utilities, our results ar e statistically robust and consistent with the interest group theory of reg ulation. Intervention in rate cases, settlement vs. litigation of cases, an d prices of alternative energy sources, as well as the size characteristics of customer groups and the firm, are significant determinants of the elast icity-weighted price-cost margin (Ramsey number) for each group. (C) 1999 E lsevier Science B.V. All rights reserved.