Nixon endorses idea of second Callaway County power plant
Saturday, November 20, 2010
Gov. Jay Nixon endorsed a proposal Friday that allows electric customers to be billed for some costs of developing a second nuclear power plant in central Missouri.
The plan would allow utilities to charge customers for the cost of getting early site permits for power plants. Currently, state law does not allow utilities to bill their customers for costs of building new power plants until the facility is online.
Nixon said the early site permit would cost about $40 million and estimated customers would pay an extra $1 to $2 per year.
The governor said a consortium of Missouri electric utilities plans to ask the Nuclear Regulatory Commission to examine whether Ameren Missouri’s Callaway County location, home to the state’s only nuclear plant, is a suitable site for another plant. Approval of the site, about 25 miles northeast of the state Capitol, would not specify a plant design or authorize construction, but would allow Missouri to seek to qualify the Callaway site for potential future development.
The utilities involved — including Ameren Missouri, the Association of Missouri Electric Cooperatives, Kansas City Power & Light and the Missouri Public Utility Alliance — have not decided whether to build the second plant, but they want the option.
“Given the uncertainties regarding how best to replace aging power plants, the potential impact of anticipated EPA regulations, and continued consideration at the federal level of carbon tax proposals, Ameren Missouri believes strongly that our state must keep all options on the table — including additional nuclear power generation,” Ameren Missouri CEO Warner L. Baxter said in a statement.
Advocates for consumers and seniors warned that customers could pay millions of dollars before benefiting from the power plant. Critics said consumers would bear the risks of the construction project instead of the utilities and their investors.
A second power plant “is a huge endeavor, but it shouldn’t be financed by ratepayers before it even puts out a single watt of power,” said Craig Eichelman, the state director of Missouri AARP.
The Consumers Council of Missouri said the proposal was not in the interest of customers. The Fair Energy Rates Action Fund, a coalition that includes businesses and consumer groups, said there should be a cap on rate increases to pay for power plants and that customers should get a refund if the plant is never built.
Missouri lawmakers last year considered legislation to help build a nuclear power plant by letting utilities seek permission from state regulators to add the financing costs for certain types of new power plants onto electric bills before plants are operational.
A 1976 voter-approved law bars utilities from charging customers the costs of a new power plant before it starts producing electricity. Ameren officials previously argued that they doubted the utility could amass sufficient private capital without repealing the 1976 law.
Nixon said this year’s proposal has protections for consumers and that building another nuclear power plant would create thousands of jobs.
“Residential and commercial ratepayers will not pay one penny unless the consortium is given the early site permit; the costs associated with seeking that permit are determined to be ‘prudent;’ and the Missouri Public Service Commission approves them,” Nixon said in a statement. “In addition, this agreement will keep consumer protections on the books for construction work in progress.”
The power plant permits address site suitability and environmental protection issues as well as plans for coping with emergencies. If approved, the permit would be valid for 20 years and could potentially be renewed for an additional 10 to 20 years.
It was not immediately clear when a decision on a plant would be made, how the utilities would operate it and how much power it would produce.
Ameren spokeswoman Susan Gallagher said it’s not uncommon for nuclear plants to be operated by multiple utilities.
“It’s a clean energy source and we need clean energy sources because the state is 80 percent coal fired,” Gallagher said. She noted that various regulations are in the works that could affect coal-fired generation.
Associated Press writer Chris Blank contributed to this report.