THE EFFECT OF THE 1986 TAX REFORM ACT AND FINANCIAL ACCOUNTING CHANGES ON UTILITY RETURNS AND RATE SETTING.

摘要

The purpose of this dissertation is to provide a comprehensive examination of the effects of recent tax law changes (the Tax Reform Act of 1986) and financial accounting changes (Statements of Financial Accounting Standards 90, 92, and 101) on utility returns, capital structure, and rate setting. With respect to the tax law change, several tax code provisions are used to explain utility returns and changes in preferred stock ownership during the period surrounding the tax changes. With respect to the financial accounting change, the dissertation provides non-agency arguments for the nearly unanimous opposition by identifying instances in which the FASB's new accounting standards deviated from judicial and legislative design. Over 150 events are summarized and used to determine whether the new standards adversely affected the stock prices of electric utilities traded on the New York Stock Exchange.; This dissertation also contains empirical tests using data derived from over 300 rate cases involving public utility commissions and the Federal Energy Regulatory Commission which reveal that the tax law and financial accounting changes partially explain the level of rate increase requests by utilities and the level of rate increase requests denied by the regulatory commissions. Tax, financial accounting, and regulatory variables are used to investigate an anomalous filing pattern and to determine whether phase-in plans were modified to comply with the new financial accounting requirements.