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This paper describes a dynamic programming model that has been developed to determine an optimal expansion plan for the generating capacity of an electric power system. The optimization model determines the least-cost mix of capacity between hydro, nuclear, thermal and peaking turbine plants, the size of the plants to add to the system, and the timing of these additions. We show how the computational requirements of this four-state-variable, four-decision-variable problem can be substantially reduced, resulting in a computationally feasible model. The techniques developed are applicable to a large class of capital budgeting problems under uncertainty. Reference is also made to the actual application of the model and an example is presented. [ABSTRACT FROM AUTHOR]

According to a recent estimate, 20 per cent of the electric power producing facilities of the U.S. is now owned and operated by the federal and local governments. Heading the list of these public projects in point of national importance as well as in point of size are the Tennessee Valley Authority's power system and the Columbia River power system. Lumping together all power plants under the jurisdiction of the Department of the Interior, one learns that the department marketed during the past fiscal year 18 billion kilowatt hours of power, or nearly 9 per cent of the national output. Needless to say, when public enterprise reaches the scale thus already attained in the field of electric power, its policies of marketing and of rate making become a subject of high economic import. The subject of this paper concerns the rate-making policies of the most dynamic of these publicly-operated systems; namely, the federal projects operated as parts of multiple-purpose river developments.

More than a decade ago Leland Olds pinpointed the problem of private power companies in the cleverly phrased statement, "Rates are high because costs are high because consumption is low because rates are high." Presumably he meant that rates and costs of private power are high relative to those for public power, leading to lower consumption per potential consuming unit in areas serviced by private power. It is the purpose of this paper to elaborate on those aspects of cost and demand which support and enlarge the argument while leading to the same general conclusion. Private power companies have also been disadvantaged relative to public power in obtaining investment funds. First, they have needed to raise equity capital, which requires a greater return than does debt. Public power had no such problem. Government-financed river basin projects had many objectives only one of which was generation of electric power, and general taxpayers bore a large share of construction costs on that account.

The author reflects on problems that need to be resolved to accomplish a large-scale use of nuclear power. He cited various types of nuclear reactors that may become of importance in the production of nuclear power, as well as systems that will utilize either uranium 235 or plutonium. One of the possible applications of nuclear energy is for stationary power plants in inaccessible places. He delved on large-scale uses of nuclear energy and conditions for nuclear power development.

The article discusses the rationale of the participation of Monsanto Co. in the development of nuclear power. First, the operation of nuclear reactors basically concerns chemical engineering. Second, the company consumes huge amounts of electric power, and nuclear power may be a cost-effective alternative. This assertion is validated by Monsanto's research conducted for the U.N. Atomic Energy Commission that electricity produced from a nuclear plant costs only a little more than the cost of generating power from conventional coal-powered plants. Third, Monsanto foresees that it can produce plutonium at a lower price to the government than the prevailing cost.

The article presents a discussion on the effectiveness of regulation of state commission of power plants. With the simplification of the financial structures there is some reason to hope that attention will be focused on taking maximum advantage of advances in technology and those measures of integration which will result in lower cost. Certain private power interests have transferred all the time and energy formerly expended on financial manipulation to fighting for higher rates and lobbying in the United States. The author refers to practical experience, it is easier from the legal viewpoint to hang onto an excessive rate than to get a legitimate rate increase where a commission is very small. Utilities must be convinced of flexibility upwards in rates before they undertake flexibility downwards. Iowa State's electric rates are the highest of the group and Wisconsin's the lowest. The Wisconsin Commission is near the top in vigor and ability. The condition of plant and its maintenance are seldom given extensive consideration in rate proceedings.

The article focuses on wartime expansion in industrial capacities in the U.S. The industrial expansion brought about by the present war production effort has involved the greatest increases in manufacturing plant and equipment ever undertaken in the country. As a result, the industrial growth that might normally have occupied a decade is being compressed into a period of three years from the latter part of 1940 to the end of 1943. The cost of war plant expansion during this period will be roughly half the investment made in manufacturing facilities during the twenties and thirties. Through November 30, 1942, the cost of approved projects for war industrial facilities amounted to 16.9 billion dollars. This includes both public and private investments in manufacturing plant and equipment, but excludes investments in transportation, power plants and other utilities, which, as of the same date, amounted to about 1.5 billions. Unless the future developments in the war necessitate a shift in the production plans, it appears unlikely that there will be any large additional expansion in this program.

This article investigates some economic implications associated with atomic energy. Aside from atomic energy itself, there result from a fission process fissionable material capable of sustaining a chain reaction, radiations and radioactive materials. The primary interest attaches to the utilization of the energy given off in the fission process. Thus far it has not been found feasible to use this energy in any way other than in the form of heat. Technical considerations restrict the manner in which atomic power can be utilized. The necessity of having a pile as large as the critical size, or larger, in order to sustain a chain reaction, the requirements of the cooling mechanism, and most important of all the necessity of shielding against lethal radiations, make imperative an atomic power plant of large and bulky structure. Use of light portable units, in automobiles, for example, is thus precluded. It is conceivable that rockets and passengerless aircraft might be propelled by atomic energy. Political and security solutions of the atomic energy problem may well run counter to economic ones. If so, the former in all probability will override the latter.

The results of this study indicate that a significant part of the variation in changes in performance not explained by the other variables in the model is explained by changes in productivity for the three firms studied. To the extent that the particular specification of variables is successful, this relationship indicates that the expected relationship between technical change and performance can be discerned empirically. Also, it appears that on the average the expected positive effects on earnings due to management decisions to make technical changes are being realized. While this favorable result is encouraging, it does not mean that this result can be extended to other firms even if they are drawn from the same industry. Several additional favorable replications of the experiment in the electric power industry chosen to include firms that used hydro-generated power, that are from other geographical regions, and that are of different sizes than the firms included in this study would be required to make generalized statements about the industry as a whole. An extension of this study that would make its results potentially useful for evaluating technical change decisions would be to develop a means of estimating the relationship between these decisions and measured technical change. This extension may be relatively difficult because of the likelihood of considerable time lags between the decisions and their physical outcome. If successful, a manager might then be able to evaluate on average both the effectiveness with which the technical change decisions are carried-out and the effect of that outcome on reported earnings. [ABSTRACT FROM AUTHOR]

The article discusses the atomic energy programs of Sweden for 1969, which include the building of a combined power and heat producing reactor to be completed during 1960-1961. Two power-producing units in the 100 megawatt range scheduled for completion by the middle of the 1960s, and one more power-producing unit of several hundred megawatts by the end of the decade. Harry Brynielsson, head of the semi-public AB Atomenergi, emphasizes that the country's output of electric power to 95% is based on the utilization of water power resources.

The article reports on the construction of the uranium production plant in Paducah, Kentucky. The principal contractor for the project is the F. H. McGraw Company from Hartford, Connecticut. Many architect-engineering firms are selected for the work at the Paducah plant including the Giffels and Vallet Inc., Sargent and Lundy and Grylls Inc. Tennessee Valley Authority (TVA) and Electric Energy Inc. are going to supply power for the uranium plant. The distribution systems of TVA and five other companies is also providing the use of total power resources of all systems.

Based on experience with a number of operating nuclear power plants the author discusses fundamental aspects of the surveillance of nuclear plant activities, among them objectives and techniques, relationships of safeguard activities to public health and regulatory agencies, and discharge of radioactive effluents. [ABSTRACT FROM AUTHOR]

The article reports developments related to nuclear power policies of several countries worldwide. An atomic power plant will be built in India by the Union of Soviet Socialist Republics. The government of Spain offered to sell 140 tons of uranium to the International Atomic Energy Agency. Japan's uranium supply for its first atomic power station will be provided by the British Atomic Energy Authority.

The article offers world news briefs related to nuclear. A program for nuclear power was urged by Robert LeBaron, chairman of the Defense Department's liaison committee to the Atomic Energy Commission. The Soviet Union claims to have an experimental nuclear power plant with an output of 5,000 kilowatts in operation.

The article reports on the announcement made by the commissioner of the U.S. Atomic Energy Commission regarding the building by the Westinghouse Company, at government expense, of a plant to supply 60,000 kilowatts to the installations of the commission. The announcement has mentioned an atomic-propelled submarine designer, who is also a rear admiral, to head the project. It has also identified Portsmouth, Ohio, as the possible location of the plant, due to the power supply needs of a gaseous diffusion plant in the area.