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The Illinois Commerce Commission’s Pro Forma Adjustment Rule: An Event Study of Regulatory Decision-Making
Advances in Business Research
View Archive Info| Field | Value | |
| Title |
The Illinois Commerce Commission’s Pro Forma Adjustment Rule: An Event Study of Regulatory Decision-Making
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| Creator |
McDermott, Karl; University of Illinois Springfield
Peterson, Carl; University of Illinois Springfield |
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| Subject |
Business;
Public utilities; Regulation; Electricity; |
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| Description |
Public utilities’ earnings are inherently linked to decisions of the regulatory body. When regulators make decisions that are unexpected or that cause additional risk to shareholders one expects that such decisions will have an effect on the price of the utility’s stock. In 2010 the Illinois Commerce Commission, the regulatory body that sets electric utility rates in Illinois, made a dramatic change in the manner in which it applied an accounting rule, the pro forma adjustment rule, causing the rates for Ameren Illinois Utilities to be substantially less than otherwise would be the case. If this decision provided information to investors, we expect the Ameren stock price to react to the decision. Using a single-firm, single-event methodology we find limited evidence that this one event had an effect on daily abnormal returns to the Ameren Corporation’s stock. We also discuss possible reasons for these results.
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| Publisher |
Tarleton State University and the University of Arkansas - Fort Smith
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| Contributor |
—
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| Date |
2012-12-05
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| Type |
info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion Peer-reviewed Articles Quantitative/Archival; |
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| Format |
application/pdf
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| Identifier |
http://journals.sfu.ca/abr/index.php/abr/article/view/85
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| Source |
Advances in Business Research; Vol 3, No 1 (2012); 53-62
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| Language |
eng
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| Relation |
http://journals.sfu.ca/abr/index.php/abr/article/view/85/59
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| Rights |
Authors who publish with this journal agree to the following terms:Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution License that allows others to share the work with an acknowledgement of the work's authorship and initial publication in this journal.Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgement of its initial publication in this journal.Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See The Effect of Open Access).
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