ABSTRACT
Investors must make individual risk-reward decisions as they choose among alternative investment opportunities. For electric utility investors, we believe the risk-reward determination should require consideration of a variety of risks associated with the ownership and operation of nuclear power plants. An impediment to future expansion of domestic nuclear generating capacity is that many investors have clear recollections of the substantial financial distress experienced during the 1980s by those companies with large nuclear plant construction schedule slippages and cost overruns. Electric utility investors implicitly are making the judgment that a large accident will not occur in the domestic nuclear utility industry while they are holding the securities of any company that has an ownership share in an operating commercial reactor. Electric utility investors should attempt to evaluate the risks associated with nuclear power plants and to differentiate among the nuclear plant operating performance of individual utilities.
