EFFICIENCY IN NUCLEAR POWER PRICING

This study investigates whether the rate structure for electric utilities with nuclear and fossil fuel generation is efficient and perhaps equitable. Data were collected on fossil and nuclear steam generation and transmission to estimate costs. Tests were performed to determine if efficient pricing practices were being followed. The results indicate that the marginal cost of nuclear generated power is less than that of power generated from fossil fuel sources. Also, the rate structure for the nuclear utilities is inefficient, with industrial rates significantly higher than first-best or second-best pricing criteria would indicate.