In an article in Public Utilities Fortnightly (PUF) concerning public utility returns, NERA Associate Director Kurt Strunk and Senior Analyst Walter Hopkins examine the distortions and challenges caused by persistent low and negative interest rates.

This article reviews recent trends in interest rates and explores the unusual phenomenon of nominal negative interest rates, while placing the latter in the context of the theory of capital and interest. Mr. Strunk and Mr. Hopkins highlight several rate drivers that, after the recent election, could lead to yield movements upward or downward, and even into negative nominal territory. The authors then analyze how such policy and market developments will affect public utility returns and expert debate in adjudicated rate cases.