Lucas Davis

Deregulation, Consolidation, and Efficiency: Evidence from U.S. Nuclear Power

Lucas W. Davis and Catherine Wolfram
American Economic Journal: Applied Economics, forthcoming.
Journal Article
Manuscript
EI@Haas Working Paper
NBER Working Paper
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EI@Haas Research Review

Abstract:

Beginning in the late 1990s electricity markets in many U.S. states were deregulated and almost half of the nation's 103 nuclear power reactors were sold to independent power producers. Deregulation has been accompanied by substantial market consolidation and today the three largest companies control onethird
of U.S. nuclear capacity. We find that deregulation and consolidation are associated with a 10 percent increase in operating performance, achieved primarily by reducing the duration of reactor outages. At average wholesale prices this increased operating performance is worth $2.5 billion annually and implies an annual decrease of 35 million metric tons of carbon dioxide emissions.