Why do we price electricity the way we do? Canadian policy in the light of politico-economic theories of governmental behaviour

In the past few decades, crown electrical utilities have exhausted available economies of scale. At marginal-cost prices, the utilities could recover costs and even a rent. Yet the available rents have not been collected through economically efficient pricing, but distributed to consumers through low prices. Who benefits from this policy? Second-best prices are found subject to the constraint that profits are nil, and are compared to actual-pricing formulas. The results are used as informal tests of various theories of public decision-making. Most theories provide a partial, but no theory provies a complete, explanation of pricing behaviour. (Reprinted by permission of the publisher.)