The financial and operational impacts of FERC Order 636 on the interstate natural gas pipeline industry

    Authors

    D. Finnoff; C. Cramer;S. Shaffer

    Comments

    Authors: contact us about adding a copy of your work at STARS@ucf.edu

    Abbreviated Journal Title

    J. Regul. Econ.

    Keywords

    gas pipeline; expense preference; regulation; EXPENSE-PREFERENCE BEHAVIOR; ELECTRIC UTILITIES; OPEN-ACCESS; EFFICIENCY; MANAGEMENT; SAVINGS; MARKET; FIRMS; COSTS; Economics

    Abstract

    The 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.

    Journal Title

    Journal of Regulatory Economics

    Volume

    25

    Issue/Number

    3

    Publication Date

    1-1-2004

    Document Type

    Article

    Language

    English

    First Page

    243

    Last Page

    270

    WOS Identifier

    WOS:000189240100002

    ISSN

    0922-680X

    Share

    COinS