Nuclear Power Rate Regulation After Eastern Enterprises: Are Ratepayers Being Taken for a Ride?

Abstract

The electric industry’s monopolistic reign is coming to an end. The movement toward deregulation is exposing as flawed the electric industry’s decision to build nuclear power plants for the generation of electricity. One such flaw is the miscalculation of decommissioning costs. Without a monopoly, nuclear power plant owners have no guaranteed rate base to pay the high costs of decommissioning. As a result, owners are lobbying the state legislatures and Congress to require recovery of these costs. This comment questions whether it is constitutional to require ratepayers to pay for such costs after they no longer receive service from a power plant. Through an analysis of Justice O’Connor’s opinion in Eastern Enterprises v. Apfel, which establishes that economic regulation can be a taking, the argument is presented that ratepayers may be able to challenge rate regulation after the termination of service as an unconstitutional taking.