Electric power industry deregulation

Deregulation - The process of changing regulatory policies and laws to increase competition among suppliers of commodities and service. The process of deregulating the electric power industry was initiated by the Energy Policy Act of 1992. (See also Restructuring)... 

William S. Raughley (1999), The Effects of Deregulation of the Electric Power Industry on the Nuclear Plant Offsite Power System An Evaluation, Washington, D.C., U.S. Nuclear Regulatory Commission. 

Safety is widely recognized to be a paramount concern in the nuclear power industry. Currently, extensive changes are taking place in the U.S. nuclear industry due to economic deregulation of electricity. Therefore, it is important to understand the potential effects of electricity deregulation on safety. The purpose of this book is to shed light upon this issue. 

We begin this chapter with a brief overview of the concept of economic deregulation, as implemented both in the U.S. electricity industry and in other industries. We then discuss the approach taken in this book to understanding the effects of deregulation on nuclear power safety. In particular, our approach rests on a detailed review of how economic deregulation has affected safety in three other industries with important similarities to the U.S. nuclear power industry—namely, the U.S. air and rail industries, and the nuclear power industry in the United Kingdom (U.K.). 

It is reasonable to believe that the effects of economic deregulation of electricity generation will be seen across abroad spectrum of safety-related areas in the U.S. nuclear power industry. The objective of this book is to provide a comprehensive overview of those consequences of electricity deregulation in the U.S. that have the potential to affect the risk of nuclear power plants. In particular, we were interested in the effects of deregulation on ... 

The nuclear power sector of the U.K. electricity supply industry also experienced dramatic reorganization and downsizing after deregulation, coupled with increased use of contractors. Problems identified in the aftermath of these changes triggered safety regulators to impose a new license condition on reactors in the U.K. 

Even if the most competitive U.S. nuclear power plants are financially healthy after deregulation, some plants (especially those at which incremental electricity generation costs are at or above wholesale electricity prices) may experience financial difficulties, with possible adverse safety consequences. Companies in fmancial distress may have reduced incentives to invest in some types of safety measures, and/or increased incentives to cut comers. Therefore, financial difficulty may be an indicator of declining safety margins in the nuclear power industry. 

We are also, both at state and Federal levels, dismantling the legal and regulatory structures that have maintained the monopoly power of yesterday s electricity sector. Twenty four states have already implemented some form of deregulation Industry and the states are taking the lead and moving forward, as they should. But federal legislation is still critical. 

In the remainder of this chapter, we examine the experiences of the case study industries in critical safety-related areas to help determine how the ongoing deregulation or restructuring of the electricity industry is likely to affect future operations, safety, and financial performance of nuclear power plants. In particular, we examine the following issues ... 

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