10.107. In considering the various factors affecting nuclear energy costs, the role of rate regulation deserves mention. Investor-owned public utilities are regulated by state public utility commissions since they have a franchise to serve a specific territory. Their responsibility is to establish rates that provide the utility with a fair rate of return on the capital invested. How­ever, when the construction cost of new nuclear power plants escalated significantly during the late 1970s and early 1980s, opposition developed to burdening customers with corresponding major rate increases. These disputes were resolved in various ways. At any rate, as a result of the need to insulate utility rates from potentially high costs for new nuclear power plants, the Public Utilities Regulatory Policy Act was enacted in 1978. This provides for a modified free-market energy economy under control of the Federal Energy Regulatory Commission (FERC). The National Energy Policy Act (NEPA) of 1992 provided further deregulation, particularly in the opening of transmission grids for the transport of electricity so that competitive marketing is now possible. Also, now permitted are non-rate — based independent power producers who can take advantage of this new access to markets.

10.108. We can anticipate some restructuring of the electric utility in­dustry in the United States with other than traditional forms of ownership being permitted. For example, independent power producers, not subject to rate structure-based regulation, might market energy on a competitive “wholesale” basis to traditional electric utilities, which would then, in turn, distribute the energy to their customers [20]. The role of nuclear power production under this marketing arrangement is likely to depend primarily on its economic competitiveness.