Deregulation, Consolidation, and Efficiency: Evidence from U.S. Nuclear Power

Lucas Davis and Catherine Wolfram

No 17341, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: For the first four decades of its existence the U.S. nuclear power industry was run by regulated utilities, with most companies owning only one or two reactors. Beginning in the late 1990s electricity markets in many states were deregulated and almost half of the nation's 103 reactors were sold to independent power producers selling power in competitive wholesale markets. Deregulation has been accompanied by substantial market consolidation and today the three largest companies control more than one-third of all U.S. nuclear capacity. We find that deregulation and consolidation are associated with a 10 percent increase in operating efficiency, achieved primarily by reducing the frequency and duration of reactor outages. At average wholesale prices the value of this increased efficiency is approximately $2.5 billion annually and implies an annual decrease of almost 40 million metric tons of carbon dioxide emissions.

JEL-codes: D21 D40 L51 L94 Q48 (search for similar items in EconPapers)
Date: 2011-08
New Economics Papers: this item is included in nep-com, nep-eff, nep-ene, nep-env and nep-reg
Note: EEE IO PR
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Citations: View citations in EconPapers (8)

Published as Lucas W. Davis & Catherine Wolfram, 2012. "Deregulation, Consolidation, and Efficiency: Evidence from US Nuclear Power," American Economic Journal: Applied Economics, American Economic Association, vol. 4(4), pages 194-225, October.

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