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Negotiated Settlements: The development of economic and legal thinking

Author

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  • Doucet, J.
  • Littlechild, S.

Abstract

The Federal Power Commission pioneered the use of negotiated settlements in the early 1960s as a means of coping with an increased workload and backlog. Legal scholars have emphasized the importance of settlements in coping with the regulatory load, and in saving time and money, albeit with some concern about transparency and the treatment of non-unanimous settlements. More recently, however, they suggest that settlements better serve the needs of the parties, allow greater flexibility and innovation, and can achieve results that lie beyond traditional regulatory authority. Recent economic research has indicated the high proportion of regulatory cases dealt with by settlements in the US and Canada and confirmed that settlements are not simply a more efficient way of doing the same thing as regulation. Rather, they involve considerable innovation, notably the introduction of price caps and other incentive mechanisms that otherwise would not have been likely or even possible.

Suggested Citation

  • Doucet, J. & Littlechild, S., 2006. "Negotiated Settlements: The development of economic and legal thinking," Cambridge Working Papers in Economics 0622, Faculty of Economics, University of Cambridge.
  • Handle: RePEc:cam:camdae:0622
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    File URL: http://www.electricitypolicy.org.uk/pubs/wp/eprg0604.pdf
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    References listed on IDEAS

    as
    1. Paul L. Joskow & Roger G. Noll, 1981. "Regulation in Theory and Practice: An Overview," NBER Chapters,in: Studies in Public Regulation, pages 1-78 National Bureau of Economic Research, Inc.
    2. Paul L. Joskow, 1973. "Pricing Decisions of Regulated Firms: A Behavioral Approach," Bell Journal of Economics, The RAND Corporation, vol. 4(1), pages 118-140, Spring.
    3. Daniel F. Spulber, 1989. "Regulation and Markets," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262192756.
    4. Doucet, Joseph & Littlechild, Stephen, 2009. "Negotiated settlements and the National Energy Board in Canada," Energy Policy, Elsevier, vol. 37(11), pages 4633-4644, November.
    5. Stephen Littlechild, 2009. "Stipulated settlements, the consumer advocate and utility regulation in Florida," Journal of Regulatory Economics, Springer, vol. 35(1), pages 96-109, February.
    6. Joskow, Paul L, 1974. "Inflation and Environmental Concern: Structural Change in the Process of Public Utility Price Regulation," Journal of Law and Economics, University of Chicago Press, vol. 17(2), pages 291-327, October.
    7. Stephen Littlechild, 2006. "Stipulations, the consumer advocate and utility regulation in Florida+," Working Papers EPRG 0615, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    8. Paul W. MacAvoy & Robert S. Pindyck, 1973. "Alternative Regulatory Policies for Dealing with the Natural Gas Shortage," Bell Journal of Economics, The RAND Corporation, vol. 4(2), pages 454-498, Autumn.
    9. Stephen Breyer, 1971. "The Ash Council's Report on the Independent Regulatory Agencies," Bell Journal of Economics, The RAND Corporation, vol. 2(2), pages 628-637, Autumn.
    10. Zhongmin Wang, 2004. "Settling Utility Rate Cases: An Alternative Ratemaking Procedure," Journal of Regulatory Economics, Springer, vol. 26(2), pages 141-163, September.
    11. Cooter, Robert D & Rubinfeld, Daniel L, 1989. "Economic Analysis of Legal Disputes and Their Resolution," Journal of Economic Literature, American Economic Association, vol. 27(3), pages 1067-1097, September.
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    Citations

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    Cited by:

    1. Stephen Littlechild, 2016. "Contrasting Developments in UK Energy Regulation: Retail Policy and Consumer Engagement," Economic Affairs, Wiley Blackwell, vol. 36(2), pages 118-132, June.
    2. Adam Fremeth & Guy Holburn & Pablo Spiller, 2014. "The impact of consumer advocates on regulatory policy in the electric utility sector," Public Choice, Springer, vol. 161(1), pages 157-181, October.
    3. repec:eee:jaitra:v:67:y:2018:i:c:p:211-223 is not listed on IDEAS
    4. Wenche Tobiasson & Tooraj Jamasb, 2014. "Sustainable Electricity Grid Development and the Public: An Economic Approach," Working Papers EPRG 1411, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    5. Stephen Littlechild, 2006. "Stipulations, the consumer advocate and utility regulation in Florida+," Working Papers EPRG 0615, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    6. Bordignon, Stephen & Littlechild, Stephen, 2012. "The Hunter Valley access undertaking: Elements of a negotiated settlement," Transport Policy, Elsevier, vol. 24(C), pages 179-187.
    7. Littlechild, Stephen, 2012. "The process of negotiating settlements at FERC," Energy Policy, Elsevier, vol. 50(C), pages 174-191.
    8. repec:sgh:gosnar:y:2018:i:2:p:49-72 is not listed on IDEAS
    9. Chakravorty, Shourjo, 2015. "A study of the negotiated-settlement practice in regulation: Some evidence from Florida," Utilities Policy, Elsevier, vol. 32(C), pages 12-18.
    10. Fellows, G. Kent, 2011. "Negotiated settlements with a cost of service backstop: The consequences for depreciation," Energy Policy, Elsevier, vol. 39(3), pages 1505-1513, March.
    11. Stephen Littlechild, 2012. "Regulation and Customer Engagement," Economics of Energy & Environmental Policy, International Association for Energy Economics, vol. 0(Number 1).
    12. repec:eee:transa:v:114:y:2018:i:pa:p:100-114 is not listed on IDEAS
    13. Heims, Eva M. & Lodge, Martin, 2018. "Customer engagement in UK water regulation: towards a collaborative regulatory state?," LSE Research Online Documents on Economics 87258, London School of Economics and Political Science, LSE Library.

    More about this item

    Keywords

    negotiated settlements; regulation; innovation;

    JEL classification:

    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L97 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Utilities: General
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • L95 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Gas Utilities; Pipelines; Water Utilities

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