Effect of nuclear ownership on utility bond ratings and yields
The major objective of this study was to test the hypothesis that investors have required an additional interest rate premium before purchasing bonds of utilities with large investments in nuclear facilities. The study required several tasks. First, the literature relating to firm bankruptcy and default was reviewed. Second, the failing financial health of the electric utility industry was assessed in terms of construction problems, the impact of federal and state regulations, and the impact of Three Mile Island. Finally, data were collected on 63 electric utilities. This allowed statistical estimation of the magnitude of the risk premium associated with utility involvement in nuclear power. The effect of this involvement on a utility's bond ratings was also examined. Multiple regression was the statistical tool used for the statistical testing and estimation.
- Research Organization:
- Pacific Northwest National Lab. (PNNL), Richland, WA (United States)
- DOE Contract Number:
- AC06-76RL01830
- OSTI ID:
- 5403249
- Report Number(s):
- PNL-4175; ON: DE82008491
- Country of Publication:
- United States
- Language:
- English
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ELECTRIC UTILITIES
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