Excess capacity and imprudency. [Why regulators are able to exclude power plants from a utility's rate base]

This article examines how excess capacity in the utility industry has lead to the improper use of the imprudence justification to exclude a power plant from a utility's rate base. In spite of current experience indicating otherwise, utilities continued to expand their capacity to match a predicted demand growth that never materialized and found themselves without the leverage necessary to bring pressure to bear on the ratemaking process.