Oust the Louse: Does Political Pressure Discipline Regulators?

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Remaining in office is a potential motivator for regulatory decisions by public utility commissioners. We examine regulatory exit, where a regulator leaves a U.S. state commission during a term or is not re-appointed/re-elected. We find that higher electricity prices lead to ousting, ousting is less common where it is more costly for the principal to whom the regulator reports, and ousting is more likely where regulators are more accountable or are more likely to share the principal's preferences. Regulatory exit does not appear to be due mainly to the revolving door. Ousting also appears to lower future electricity prices.