RATE STRUCTURES IN NUCLEAR AND NONNUCLEAR US ELECTRIC UTILITY JURISDICTIONS

This study investigates whether the structure of customer rates for US electric utilities with nuclear power generation is significantly dif ferent from the rate structure of non-nuclear utilities. Using previou s estimates of the marginal costs of generation by nuclear and fossil- fuel plants, and of transmission and distribution, tests are made to d etermine if pricing practices are similar in nuclear and non-nuclear j urisdictions. The results show that the rate structure for the nuclear utilities is inefficient, with industrial rates significantly higher than first-best or second-best pricing criteria allow, whereas the rat es for non-nuclear utilities are second-best efficient, with a slight favouritism toward the industrial class.