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Economic and Regulatory Factors Affecting the Maintenance of Nucleaer Power Plants

James G. Hewlett

Year: 1996
Volume: Volume17
Number: Number 4
DOI: 10.5547/ISSN0195-6574-EJ-Vol17-No4-1
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Abstract:
This paper examines the factors causing the escalation in the 1980s and' subsequent leveling off of nuclear power plant non-fuel Operating and Maintenance (O&M) costs. Over the period 1974-93, real (inflation-adjusted) non-fuel O&M costs escalated from about $23 to about $97 per kilowatt of installed capacity (kW). However, much of the escalation in costs occurred in the 1980s. Over the period 1975-87, real O&M costs escalated at an annual rate of about 11 percent. Since then, the annual growth rate in real O&M costs fell to about I percent. The research found that the escalation in O&M costs was primarily due to increased regulatory activity by the Nuclear Regulatory, Commission. More important, there is little evidence that the moderation in the growth in O&M costs was regulatory induced, but instead was due to changes in the economic incentives to improve plant performance.





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