The economic consequences of regulatory accounting in the nuclear power industry: market reaction to plant abandonments

摘要: Abstract Between 1972 and 1990, US electric utility companies cancelled orders for 117 nuclear power plants (NEI, 1996, pp. 1–6). The regulatory accounting methods adopted by rate setting commissions determined whether utilities could recover the losses on through higher rates. In effect, choice of how billions dollars invested in was allocated between stockholders, ratepayers, taxpayers (DOE/EIA, 1983, ix–x). Our paper examines economic consequences to stockholders capital project abandonments a regulated industry. results show that while treatment abandonment costs generally favorable investors, market reacted negatively announcements indicating investors did not expect fully recoup losses. Two stage regression is used investigate determinants market’s reaction cancellations.