Nuclear power at center of debate on two Senate bills

Tuesday, March 15, 2011

Ameren Missouri wants an exemption from a state law keeping utility companies from passing new power plant construction costs on to customers before plants are operating and producing power, also known as the Construction Work in Progress law.

Sen. Mike Kehoe, R-Jefferson City, filed Senate Bill 321, backed by Gov. Jay Nixon, that would allow Ameren to recoup from consumers the $40 million cost for an early site permit from the U.S. Nuclear Regulatory Commission for a second reactor at its Callaway County nuclear plant.

Sen. Jason Crowell, R-Cape Girardeau, became a key figure in the issue when Kehoe's bill was referred by Sen. Rob Mayer, R-Dexter, to a committee he chairs: the Veterans Affairs, Emerging Issues, Pensions and Urban Affairs Committee. A six-and-a-half hour committee hearing took place Wednesday to discuss Kehoe's bill and Senate Bill 406, filed by Crowell, which allows Ameren an exemption from Missouri's Construction Work in Progress law but adds several consumer protection measures not in Kehoe's bill.

The debate focuses on energy rates, not the merits of nuclear energy now drawing worldwide attention because of the nuclear crisis in Japan following Friday's earthquake and tsunami.

"Our hearts and prayers go out to the citizens of Japan, but it doesn't have any impact whatsoever on this legislation," Crowell said.

The Fair Energy Rate Action Fund, a coalition backed by Ameren's largest electric consumers, opposes Kehoe's bill to allow the company to pass along costs to obtain the nuclear site permit it needs.

Noranda Aluminum, in New Madrid, Mo., is Ameren's largest customer, consuming about 10 percent of the energy Ameren produces, said Chris Roepe, executive director of the Fair Energy Rate Action Fund.

Noranda is already in a rate case with Ameren where Cole County Circuit Judge Paul Wilson last year ordered the Public Service Commission to suspend the rate increases and return to Ameren's 2007 rates. Last week the PSC said it doesn't have the jurisdiction to do that. It's unclear what will happen next in that case.

The Fair Energy Rate Action Fund group supports Crowell's version of the bill giving Ameren an exemption because it includes consumer protection measures:

* Capping the amount of money Ameren can recover from its customers.

* Refunding customers for permit costs if a plant is never built.

* Providing additional funding for the Missouri Office of Public Counsel, which represents the state's utility customers in rate cases.

The restrictions will hold Ameren accountable to consumers, Crowell said.

After massive cost overruns building the first Calloway County reactor, Missouri's Construction Work in Progress law was approved by voters in 1976, Crowell said.

Debatable expense

Ed Smith, spokesman for the Missouri Coalition for the Environment, said the existing Construction Work in Progress law is the best consumer protection of all.

"Ameren will not be able to build a new nuclear power plant without coming back to the legislature and asking for a full repeal of CWIP and our rates will go up an incredible amount," Smith said. "Nuclear energy is one of the most expensive options out there."

Scott Bond, manager of nuclear development for Ameren Missouri, disagrees with that claim, saying that when Ameren looks at the cost of constructing a nuclear plant, the cost of fuel, operation and maintenance costs, nuclear is "very competitive" for base load power generation.

Ameren says it will need more power generation capacity to meet customer demands by 2022. Stricter environmental regulations may also cause Ameren to retire some of its coal-fired power plants, Bond said.

"We're looking at pursuing an early site permit to maintain that option for the future," Bond said. A second permit would be required from the U.S. Nuclear Regulatory Commission before construction can begin.

The Missouri Coalition for the Environment and other nuclear energy opponents lobbying against both Crowell's and Kehoe's bills say Japan's failed nuclear facilities strengthen their argument that nuclear power is not "clean energy."

"Nuclear power is inherently not clean, as we're finding out right now," Smith said. "If nuclear energy was clean, they wouldn't be evacuating 200,000 people that live near that nuke plant. Just because the U.S. allows nuclear power doesn't mean it's safe."

When it comes to earthquake safety, Bond said, the Calloway County plant was designed to withstand the most severe earthquake Missouri has ever experienced -- the 1812 earthquake along the New Madrid fault.

"Japanese plants survived the earthquake," he said. "It was the tsunami that compromised their safety equipment."

No further hearings on the bills have been scheduled.


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