Corporate Incentives and Nuclear Safety

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.

Speaker: Catie Hausman, University of California, Berkeley