Regulatory valuation of public utilities: A case study of the twentieth century

Paul A. Grout, Andrew Jenkins, Anna Zalewska

Research output: Contribution to journalArticlepeer-review

4 Citations (SciVal)


This paper analyses the regulatory attitudes to asset valuation in the twentieth century. It focuses in particular on the US experience from Smith v Ames 169 US 466 (1898) to Federal Power Commission v Hope Natural Gas 320 US 591 (1944) and on the experience in the UK in last two decades of the century. It is shown that movements in capital goods prices in the US had a significant impact on regulatory decisions, e.g., regulators were more likely to choose original cost as the regulatory valuation when replacement cost was high. In the UK regulatory agencies moved through valuations increasingly less favourable to the companies from a traditional historic cost model to an ‘original cost’ model based on flotation value. Far from displaying regulatory capture, the evidence is consistent with robust regulation against ‘monopoly’ incumbents.
Original languageEnglish
Pages (from-to)936-955
Number of pages20
JournalBusiness History
Issue number6
Early online date19 Nov 2013
Publication statusPublished - 30 Jun 2014


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