Preparing for a Nuclear Exchange

Three ways to value nuclear power plants for buyers and sellers.

Appraisers don't make the market-they reflect it. But when the market speaks, appraisers listen. The appraiser must use judgment, experience, and common sense to correlate the final conclusion of value for a subject plant, basing the conclusion on market indicators.

The valuation of an operating nuclear plant assumes the transfer of ownership as of a particular date. The transfer price is based on the concept of a willing seller and a willing buyer, neither being forced to participate in the transfer and, also, both being reasonably knowledgeable of the relevant facts associated with the operations and the business. To determine the transfer price or value of the plant, three approaches to value are available to review: the sales comparison approach (based on the sales of similar plants), the income approach (based on projected cash flows), and the cost approach (based on the cost of construction).