Note:
Joe S. Poff, Determination of the Allowable Rate of Return by the Texas Public Utilities Commission, 57 Texas L. Rev. 289 (1979).
 

Abstract:
In his note, Joe Poff describes the process by which revenue requirements of utilities are determined by regulating agencies operating under the 1975 Public Utility Regulating Act. Poff explores the role the two main quantitative indices, rate base, and rate-of-return play in light of the purposes and policies of the PURA. Poff specifically recommends that in deciding what return a given utility will be allowed, the regulatory agency must focus on the role that profits serve and apply those principles in the rate making process. Thus he urges the “strict” cost of capital approach should be used, modified by an allowance for efficiency using the Iulo method of multiple regression analysis.