Messrs. Kolbe and Tye perform an important service in their critique of Duquesne Light & Power Co. v. Barasch. Especially valuable is their exploration of the two different types of risk faced by a regulated utility-first, the risk of being unable to recover its investment in a plant, no matter how prudently incurred, and second, the risk of retroactive changes in the regulatory policy. The second risk appears to be far more of a problem. As Kolbe and Tye point out, it engenders a peculiar type of instability. If the risk is reflected in a higher cost of capital, as it should be, regulators may feel bound to exercise the freedom of maneuver for which ratepayers will have paid.

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