“Regulation of electric utility companies is best conducted when public utility commission regulators are afforded a significant level of independence from the political process. Close observers of utility regulation, however, recognize that PUCs have become increasingly politicized. There are several mechanisms through which politicians can influence PUC regulatory processes, including holding disciplinary hearings, appointing commissioners and amending governing legislation. Assuming that politicians represent their constituents’ interests, one might expect these mechanisms to produce consumer-friendly regulatory outcomes, including a low authorized return on equity, or ROE.”

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