The Economics of State Government Assistance to Nuclear Plants

11 Pages Posted: 2 Jun 2019

See all articles by Adam Millsap

Adam Millsap

Florida State University - Department of Economics; George Mason University - Mercatus Center

Date Written: May 9, 2019

Abstract

Coal was the largest source of electricity generation in the United States for decades before being supplanted by natural gas in 2015. Nuclear plants have also been a significant electricity source in America but now many of them are on the verge of closing. Meanwhile, the amount of electricity produced by renewable sources is growing. The rise of both natural gas and renewables has weakened the financial prospects of nuclear as a long-term power source. In response, executives of nuclear power plants are lobbying government officials for assistance and officials in many states have been receptive. This paper provides a brief background of electricity generation, discusses some of the current proposals to assist nuclear plants, and explains the economics of the proposed government assistance plans.

Keywords: Industry Regulation, Nuclear Energy, Power Plants, Electricity, Subsidies

JEL Classification: H25, L52, L94, Q48

Suggested Citation

Millsap, Adam, The Economics of State Government Assistance to Nuclear Plants (May 9, 2019). Available at SSRN: https://ssrn.com/abstract=3385709 or http://dx.doi.org/10.2139/ssrn.3385709

Adam Millsap (Contact Author)

Florida State University - Department of Economics ( email )

288 Bellamy Building
Tallahassee, FL 30306-2180
United States

George Mason University - Mercatus Center ( email )

3434 Washington Blvd., 4th Floor
Arlington, VA 22201
United States

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