(E3 ) Working Papers Series
E3 Working Paper WP-019R Abstract
WP-019R: Catherine Hausman, "Corporate Incentives and Nuclear Safety " (Revised March 2013) Full Paper
Abstract
Approximately half of all commercial U.S. nuclear power reactors have been sold by public utilities to private, independent power producers in the past fifteen years. Previous work has found evidence of dramatically increased generation at these divested plants. At the time of the ownership transfers, some policy makers raised concerns that profit-maximizing corporations would ignore safety. Others, however, claimed that deregulation and consolidation would improve reactor management, and that corporations would work hard to avoid costly plant shutdowns. This paper provides the first comprehensive evidence of the impact of these ownership transfers on plant safety. Using a model of endogenous maintenance decisions, I show conditions under which safety is expected to improve following deregulation. I find empirical evidence that safety did not deteriorate, and in some cases increased, following divestiture.