This article demonstrates the rent seeking by customers of regulated electric utilities in the form of rate suppression leads to a set of regulated prices that is not Pareto optimal over time. A multiperiod economic model of rate regulation shows that, if customers are willing to accept immediate short-term losses in economic welfare to allow the utility to enjoy larger profits, the discounted value of future increments to customer welfare will more than offset their earlier self-inflicted losses. Empirical evidence suggests that this result is true for any plausible range of discount rates. Copyright 1990 by the University of Chicago.