Ameren exec: Electricity demand will exceed production capacity soon

Customer demand for electricity is expected to exceed Ameren Missouri's power generation capabilities within nine years, according to the utility's Integrated Resource Plan presented to the Cape Girardeau Rotary Club at the Show Me Center on Monday.

Skip Smallwood, business development executive with Ameren Missouri, discussed the options and the costs to produce more power in the future. The company is required to file an Integrated Resource Plan with the Missouri Public Service Commission every three years.

During this year's legislative session, a bill to allow Ameren to charge electric customers for some costs of developing a new nuclear power plant was not approved.

"Unfortunately, the legislature ran out of time. We are disappointed it did not pass," Smallwood said. "It is a factor that we cannot recover those costs while a new plant is under construction."

Sen. Mike Kehoe, R-Jefferson City, who sponsored this legislation that would allow power companies to raise rates to pay at least part of the $45 million permit fee for a new nuclear plant, has asked the governor to call a special session to attempt to pass his bill, Missouri News Horizon reported.

Gov. Jay Nixon said Friday he doesn't see the bill as something that's pressing enough to consider calling a special session. The legislature can call itself into session, but it takes three-quarters of the House and three-quarters of the Senate to sign a request petition.

Currently, it costs Ameren Missouri about 5 cents per kilowatt-hour to produce electricity. About 75 percent of its power is generated from coal, while 20 percent comes from Ameren Missouri's nuclear power facility in Fulton, Mo. Five percent comes from water and other sources.

Coal is still an option for the future, but because of new EPA standards taking effect in 2016, coal plants must be upgraded with new environmental controls or new plants must be constructed.

Nuclear power plants have the lowest production cost, about 10 cents per kilowatt-hour, but those plants are complex structures that require a high initial investment, Smallwood said.

New coal power plants, with the technology to reduce emissions, cost 17 to 23 cents per kilowatt-hour. Solar power is the most expensive, about 37 cents per kilowatt-hour.

Over the past 20 years demand for power from Ameren Missouri customers has doubled, and in the next 20 years it's expected to rise another 20 percent, Smallwood said.

"That's more than 1,000 more megawatts we're going to have to somehow put on the line to meet that demand," he said.

Currently, Ameren Missouri produces 10,500 megawatts of electricity, but by 2030 about 11,500 megawatts will be needed.

Coupled with increasing customer demand is the possibility Ameren could lose some of its power generation capacity as older plants are taken out of use due to environmental regulations, Smallwood said.

"When a plant is 40 years old, it may not be economical to install devices required to clean emissions," Smallwood said.

It's estimated 10 to 33 percent of the nation's coal-fired electric plants will be retired as a result of EPA rule changes, he said.

Ameren could close its 58-year-old Meramec plant in Jefferson County between 2015 and 2020, according to Smallwood.

Several other utilities across the country are looking at similar closures. The Tennessee Valley Authority will close 18 coal-fired plants by 2017. Louisville Gas and Electric will retire three of its coal plants, and Progress Energy, in the Carolinas, will close 11 of its coal plants.

Ameren Missouri is evaluating options to generate additional power as well as increase the energy efficiency of its customers. Its energy efficiency programs, however, depend on customers accepting these opportunities, Smallwood said. Those include rebates on energy-efficient light bulbs, appliances and HVAC systems for residential customers and incentive programs for businesses.

"We're looking at what it costs to build a new facility, what it costs to maintain it and the life span it will have," Smallwood said.

Several resource options are under consideration, including natural gas-fired plants, renewable energies like wind and solar, hydroelectric and biomass, which uses wood products and crop waste.

Ameren Missouri is building a Renewable Energy Center in Maryland Heights, Mo., where methane gas from rotting trash will be burned to produce electricity. Solar panels were also installed at the company's St. Louis headquarters as part of a pilot project.

mmiller@semissourian.com

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