The Financial and Operational Impacts of FERC Order 636 on the Interstate Natural Gas Pipeline Industry
AbstractThe Federal Energy Regulatory Commission's Order 636 fundamentally altered the regulatory and operational environment of the natural gas industry in 1992, as the culmination of several directives aimed at relaxing regulation and fostering competition. We hypothesize that gas pipeline firms subsequently changed their operational and financial behavior in ways consistent with reduced balkanization, increased competition, and reduced expense preference behavior. Our results indicate that these firms have become more homogeneous financially but less so operationally. We find evidence that the marginal profitability of various pipeline activities has responded more to financial market conditions than to the regulatory environment.
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Bibliographic InfoArticle provided by Springer in its journal Journal of Regulatory Economics.
Volume (Year): 25 (2004)
Issue (Month): 3 (05)
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Web page: http://www.springerlink.com/link.asp?id=100298
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- Vladimir Hlasny, 2008. "The impact of restructuring and deregulation on gas rates," Journal of Regulatory Economics, Springer, vol. 34(1), pages 27-52, August.
- Severin Borenstein & Meghan Busse & Ryan Kellogg, 2007. "Principal-agent Incentives, Excess Caution, and Market Inefficiency: Evidence From Utility Regulation," NBER Working Papers 13679, National Bureau of Economic Research, Inc.
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