Pricing in the nuclear power industry: Public or private interest?

Abstract

Abstract. This paper tests empirically the Ramsey version of the public-interest theory of regulation by examining the pricing practices in the nuclear power industry, using a 1985 cross-sectional sample of 40 electric utilities. Other researchers have avoided this segment of the industry because of difficulties with nuclear fuel data, or perceived differences in the underlying production function. We show that regulators respond to political influences according to the Stigler-Peltzman version of regulation and that Ramsey pricing cannot be validated, at least for the nuclear segment of the electric power industry.

Values Versus Regulations: How Culture Plays Its Role

“…Since, Hotelling's early study on pricing recommended special taxes on public enterprises or natural monopolies (Hotelling, 1938), far more regulatory attention has been paid to industries such as gas, electricity, water, airlines, post, and telecommunications (Becker, 1986;DeLorme et al, 1994;Eads, 1983;Kaserman et al, 1993). Just as specified in ''Public Interest Theory,'' poor market dynamics are the basis of one important premise for regulation policy; and regulation is just an intervention to correct ''market failures'' (including monopoly, externalities, or some other sources) (Fisher, 1979) or to compensate for ''missing markets'' (Chick, 1990, p. 1).…”

Environmental Policy, Public Interest and Political Market

“…He obtained the result that public interest theory has greater explanatory power than that developed by Stigler. Nevertheless, Delorme et al (1992), in a similar study in the same sector of activity, reached a different conclusion which validated Stigler's theory.…”

Nuclear and Fossil Fuel Steam Generation of Electricity: Differences and Similarities

“…As DeLorme, Kamerschen, and Thompson [11,[385][386][387][388][389][390][391][392][393][394][395][396] The labor cost component of total cost is derived in a manner similar to that of the seminal work of Nerlove [24] and Christensen and Greene [9], except for the additional weighing factor for nuclear power production. All labor cost figures are available in Financial Statistics [13].…”

“…DeLorme, Kamerschen, and Thompson [11] show private interests outweigh the public interest in regulatory rate decisions to a greater extent when nuclear power is present.…”