The politics of electric utility policy: The role of state institutional actors in designing rate structures and in adopting deregulatory policy innovations

In this dissertation, I examine the role of state institutional actors and interest groups in regulatory and deregulatory decisions in order to understand the policymaking process at the state level. My objectives in this dissertation are to find the primary factors having an influence in regulatory decisions and the primary cause of change in regulatory policy at the state level. I investigate state government regulation of the electric utility industry, which has been regulated by state governments for nearly one hundred years and is presently moving to a deregulatory regime.;I focus on the design of rate structures and the deregulation of the electric utility industry. The design of rate structures is a politically important regulatory issue because it determines who pays more at the expense of others. Likewise, the deregulation of the industry is a technically complex issue because it requires technical expertise. I examine the role of state institutional actors and interest groups in designing rate structures and in adopting deregulatory policy innovation.;I find that the state legislature and the manner of selecting regulators play a major part in designing rate structures. And, I find that the state legislature, public utility commissions, electricity prices and the development of nonutilities significantly increase the likelihood that state government adopts deregulatory policy innovations. These results strongly support the institutional theory, which places an emphasis on the role of institutional actors in explaining regulatory and deregulatory decisions. However, these results do not support the interest group theory of policy-making, which emphasizes the lobbying activities of interest groups in regulatory and deregulatory decisions. The theory of innovation, which is the integration of the internal determinants model and the regional diffusion model, is partially supported because I do not find effects for nearby states that deregulate the electric utility industry on other states that have not deregulated the industry.;Political scientists have believed that the role of institutional actors is insignificant in a policy area where issues are high in complexity. However, my results show that the state legislature play the most important part in regulatory and deregulatory decisions. It plays a significant role even if an issue is technically complex. My results also show that a regulatory agency plays a major role in technically complex decisions. They also indicate that the professionalism of the state legislature and regulatory agencies has increased during the last decade. Therefore, the role of state institutional actors will be more significant as the degree of professionalism increases.