Profit made on stock (equity) in a company or venture. In the energy industry, ROE for public utilities is typically calculated based on an estimated ROE from stock in an unregulated corporation. This must be done to keep public utility investment attractive to investors, since most utilities require investment funding to finance expansion, maintenance and other essential costs. Investors must believe they will receive a certain level of return from public utility investment or they will not likely invest in these utilities.

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