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Editorial: More nuclear power

Thursday, January 15, 2009

AmerenUE, looking to the future, knows that demand for electricity is going up. To meet that demand, Ameren must come up with more generating capacity. It already has a nuclear-powered plant in Calloway County near Fulton, Mo. Motorists driving along I-70 can see the plant's distinctive cooling tower on the horizon near the Missouri River to the south.

Now that Ameren has filed an application with federal authorities for a second nuclear facility. A big concern is how to pay for the plant, which would cost in the neighborhood of $9 billion. A state law says Ameren can't recover any of that construction cost until the plant is producing electricity. If forced to finance the project on its own until the plant is online, Ameren would likely incur additional lending costs of $1 billion -- which would ultimately be passed along to consumers.

Ameren want that law, approved by Missouri voters in 1976, repealed. Others want the law preserved to protect consumers. This faceoff is expected to consume a good deal of attention in Jefferson City during the current legislative session.

Nuclear power is a sensible way to produce the electricity Missouri needs without resorting to additional coal-fired or natural gas-burning plants. If, as some consumer advocates suggest, there are ways to meet the demand without scrubbing the 1976 law, legislators need to hear them.

Ameren's plan would have a far-reaching impact well beyond supplying electricity to energy-hungry customers. A project this size would create jobs, boost economic development and help stimulate the state's economy.

This may be a tough issue to reconcile, but appropriate deliberation and prudent action are needed.

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If I remember correctly, not one bit of the energy generated at the Callaway facility is used in Missouri. I believe all of it is sold to ND,WY and the likes. What good will it do if the second one built does the same. That has been the problem with most of these plants built. It is sold on the "energy market" to generate revenue for the owner of the facility!

-- Posted by mohacker on Thu, Jan 15, 2009, at 9:45 AM

In regards to where the power from Callaway goes, suggest one likely business plan would be to sell the power from the lowest-cost generators to one's service territory which must be served, and to sell the power from the higher-cost generators into the market as prices permit achievement of target profit margins.

Since Ameren is a regulated utility, their revenue is somewhat fixed - so it would make sense to first sell the power from those units that are the least expensive to operate into the home territory. Affords the opportunity for a larger profit margin, since the home territory is always there, but the market demand and related sales opportunities fluctuate wildly on a seasonal basis.

Typically, the larger generating units are the least expensive to operate - these would include the nuclear and large coal-based generators. Then there's hydro from the dams - limited in quantity but the 'fuel' is essentially free and also at the mercy of mother nature. The smaller units are more expensive due to lesser economies of scale and higher fuel prices - these would include the small coal units and the natural gas-fired units.

Suggest on days and nights with extreme temperatures - Ameren is likely using all of their generation just to service the home territories, leaving very little to export, and perhaps may be in a position where they need to go out on the market and make purchases - particularly if one of their own generators trips off the line.

Given the environmental uncertainties, doubt that there will ever be another coal plant planned and built in Missouri. Wind holds some promise to provide relief, but it's not realistic to think that wind can ever replace all of what is currently being generated with coal and nuclear. It will be interesting to see how the recently passed renewables proposition plays out in the next few years.

Suggest that many utilities are hurting with the need to build more baseload generation - generation that is not at the mercy of mother nature and that is economical to operate reliably. With reduced margins of generating capacity - can expect more upward price pressures (that supply and demand thing), as well as a greater potential for power outages. Natural gas is probably the closest thing to a 'friendly' fuel available - but it has been subject to extreme price volatility in the last ten or so years - ranging from about $2.50 up to almost $20 per million BTU (about 1000 cubic feet). Plus - there's only a handful of major natural gas pipelines that service the country - one terrorist strike would leave many in the cold and in the dark.

Many of today's nuclear plants are running on technology from the 60s - mainly because it's so difficult and expensive to certify new instrumentation or control systems for use. Would hope that the newer technology available for any new construction would improve the safety factor beyond the relatively great level it's already at.

As far as the financing issue - suggest the consumer is going to be paying for it one way or another. The 'pay as you go' proposal presents the opportunity to save some rather large dollars in interest as compared to the current legislation. Suspect the sour taste that brought on the legislation in the first place was due to the massive cost overruns during the construction of the previous round of nuclear units.

Given the choice between building nuclear, or building something else - I would be for nuclear.

Given the choice between paying now, or paying later - I would be for incurring a little extra pain now in order to save money over the long haul.

At any rate, the utilities are going to make a choice based on what they know now - nuclear units take 7-10 years to bring online. Should they choose to build other types of generation - it may not be as cheap or as reliable, or may have to gamble on unproven technologies. By the time the warnings of power shortages become actual experiences, it will be too late. So if one is the type who's always thinking, 'what about the children' - this is one of those defining moments to put the thinking cap to good use.

-- Posted by fxpwt on Thu, Jan 15, 2009, at 8:36 PM

Carbon-free nuclear power is the ONLY way the world can retire emission-belching coal generating plants and possibly check global warming. It's that simple. Wind and solar power cannot get near retiring coal plants because of their intermittent nature. I recommend www.energyplanusa.com for an unbiased discussion of energy issues.

-- Posted by Rmoen on Fri, Jan 16, 2009, at 2:12 PM

As I understand the Private utility’s proposal, they want to borrow money from the ratepayers while they are building the plant and not provide any monetary compensation (i.e. interest on borrowed money) to the ratepayers. Hardly seems fair.

What could be reasonable is for AMREN to forgo all profit on the operational new unit until such time as the ratepayer’s investment is paid off, calculated at whatever the going Wall Street rate would be for such projects. Of course the utility would need to invest a reasonable amount of their own money in the endeavor, say 30%.

Please note, I do not object to nuclear power per se. However, I do object to private companies borrowing money from their customers at a 0% interest rate.

-- Posted by kellermfk on Fri, Jan 16, 2009, at 10:00 PM

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