Electricity market deregulation and environmental regulation: Evidence from US nuclear power

Nuclear power in the United States provides substantial electricity supply and thus this study replicates the finding in Davis and Wolfram (2012) that divestiture leads to a statistically significant and economically meaningful increase in nuclear power reactor output. Divestiture is the sale of generating assets from regulated, investor owned utilities to independent power producers with the profit motive to increase output. The divestiture effect result is robust to specification choice and testing with an extended dataset containing additional years of observations. This study also finds the new result that reactor output increases via an indirect environmental policy mechanism. The environmental regulations considered occurred contemporaneously to the divestitures and thus provides a further robustness check on the divestiture effect result. (C) 2019 Elsevier B.V. All rights reserved.