Statistical Utility Theory for Comparison of Nuclear versus Fossil Power Plant Alternatives

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Abstract
A statistical formulation of utility theory is developed for decision problems concerned with the choice among alternative strategies in electric energy production. Four alternatives are considered: nuclear power, fossil power, solar energy, and conservation policy. Attention is focused on a Public Electric Utility thought of as a rational decision-maker. A framework for decisions is then suggested where the admissible strategies and their possible consequences represent the information available to the decision-maker. Once the objectives of the decision process are assessed, consequences can be quantified in terms of measures of effectiveness. Maximum expected utility is the criterion of choice among alternatives. Steps toward expected values are the evaluation of the multidimensional utility function and the assessment of subjective probabilities for consequences. In this respect, the multiplicative form of the utility function seems less restrictive than the additive form and almost as manageable to im...