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Interest Group Representation in Administrative Institutions: The Impact of Consumer Advocates and Elected Commissioners on Regulatory Policy in the United States

Abstract

We use a panel database of rate reviews conducted for U.S. electric utilities to assess how consumer advocates and elected Public Utility Commission heads affect regulatory policy and utility strategy. We find first that utilities postpone rate reviews in states with consumer advocates and elected commissioners. Second, we find that, after controlling for observed and unobserved state characteristics, states with consumer advocates and elected commissioners tend to grant lower returns on equity. Third, these institutions have differential impacts on different types of consumer: consumer advocates are associated with higher residential-industrial rate ratios while elected commissioners are associated with lower residential-industrial rate ratios.

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