Your Opinion: Alternative idea to finance nuclear plant

Dear Editor:

Some of our legislators in the General Assembly would have us believe the sky is falling and we absolutely have to overturn the law passed in the 1970's disallowing Ameren to charge electric consumers in advance so they could build a nuclear reactor. Ameren sang that song in the 1970s and guess what? The Callaway nuclear reactor was built without consumers paying in advance, coming online in December 1984.

Without gouging the consumer, Ameren has reaped the rewards of taking the risk to build the plant. With the exception of 2010, Ameren's net income after taxes ranged from $547 million in 2006 to $612 million in 2009 (phx.corporate-ir.net/phoenix.zhtml?c=91845&p=irol-fundsnapshot).

Ameren has about 239 million shares of common stock outstanding (www.nyse.com/about/listed/lcddata.html?ticker=AEE) and paid stockholders dividends ranging between $2.95 per share in 2008 to $2.75 per share in 2010 (phx.corporate-ir.net/phoenix.zhtml?c=91845&p=irol-estimates). Not a bad return on investment considering the economy.

But here we are, 40 years later and Ameren still thinks the consumer should pay increased rates in advance in case they build a second nuclear reactor. How nifty would that be if they could pull it off? It would surely preserve the nearly $3 per share annual dividend for the stockholders, and allow Ameren to continue paying over $6.5 billion in compensation annually to top executives (www.dailyfinance.com/company/ameren-corporation/aee/nys/key-executives), which doesn't include nearly 60,000 stock options for those same executives (http://www.dailyfinance.com/company/ameren-corporation/aee/nys/insider-transactions).

Here's a novel idea - Ameren should issue more common stock. At today's closing price of $27.96 per share, issuing another one million shares would generate about $30 million dollars, a nice down payment on that permit for the second reactor. Next, issue tax free bonds to raise cash. This places the risk where it should be, on top executives with extremely high compensation and the stockholders they want to protect.

The way I see it, without the consumer, there would be no stockholders.