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Economic and Regulatory Factors Affecting the Maintenance of Nuclear Power Plants

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  • James G. Hewlett

Abstract

This paper examines the factors causing the escalation in the 1980s and' subsequent leveling off of nuclear power plant non-fuel Operating and Maintenance (O&M) costs. Over the period 1974-93, real (inflation-adjusted) non-fuel O&M costs escalated from about $23 to about $97 per kilowatt of installed capacity (kW). However, much of the escalation in costs occurred in the 1980s. Over the period 1975-87, real O&M costs escalated at an annual rate of about 11 percent. Since then, the annual growth rate in real O&M costs fell to about I percent. The research found that the escalation in O&M costs was primarily due to increased regulatory activity by the Nuclear Regulatory, Commission. More important, there is little evidence that the moderation in the growth in O&M costs was regulatory induced, but instead was due to changes in the economic incentives to improve plant performance.

Suggested Citation

  • James G. Hewlett, 1996. "Economic and Regulatory Factors Affecting the Maintenance of Nuclear Power Plants," The Energy Journal, , vol. 17(4), pages 1-31, October.
    • Handle: RePEc:sae:enejou:v:17:y:1996:i:4:p:1-31
    DOI: 10.5547/ISSN0195-6574-EJ-Vol17-No4-1
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    References listed on IDEAS

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    1. Rust, John & Rothwell, Geoffrey, 1995. "Optimal Response to a Shift in Regulatory Regime: The Case of the US Nuclear Power Industry," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 10(S), pages 75-118, Suppl. De.
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