What the Parsons Study Really Says about Nuclear Power Economics

The Grand Canyon Controversy, Round ?

William E. Hoehn

Expert InsightsPublished 1967

One of a series on the Grand Canyon dam controversy, this paper analyzes the validity of a comparison of nuclear and hydroelectric power plants made for the Arizona Interstate Stream Commission by Ralph M. Parsons Co. in 1966. The Parsons study assumes use of an obsolete reactor type and an unrealistic transmission system. Costs of land, plant, equipment, working capital, and nuclear fuel are shown to be overestimated by many millions, while hydro costs are underestimated similarly. Estimates of nuclear-plant revenues assume a kilowatt-hour sales price that is half what users now pay for electricity. Hydro plant revenue estimates assume much higher kilowatt-hour prices and continuous operation at full rated capacity. Estimates of dam construction cost are 10 to 15 percent under reality. Costs of reregulating the Colorado River and compensation for using Indian reservation land are ignored, as is the $4.75 million fuel-equivalent annual water loss by evaporation. (See also P-3302, P-3505, P-3541, P-3546.) 26 pp. Ref.

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Hoehn, William E., What the Parsons Study Really Says about Nuclear Power Economics: The Grand Canyon Controversy, Round ? Santa Monica, CA: RAND Corporation, 1967. https://www.rand.org/pubs/papers/P3548.html.
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