No, I Will Not Pay for Your Nuclear Plant

October 20, 2008

No, I Will Not Pay for Your Nuclear Plant

Did you know AmerenUE isn’t allowed to raise its rates to finance future construction projects? More specifically, if a customer is not gaining utility from a project that is currently in the works, Ameren is not allowed to raise that customer’s rates to pay for the construction work in progress (CWIP). Seems like a fair law to me. I don’t want to have to pay for something I’m not using, and, more importantly, something I don’t necessarily want. And, yet, that is what Ameren is trying to do in Callaway County.

Callaway County is the home to one Ameren nuclear plant, and could possibly be the home of a second. If Ameren gets its way, the current law that prohibiting it from charging for CWIPs would be repealed, and current customers would have to finance the second Callaway County nuclear plant. Already, Ameren is trying to pass the $46 million filing fee price tag onto customers. That’s right: $46 million. For a filing fee.

Now, this isn’t the first time these shenanigans have popped up. Ameren tried to get rid of this law back in ‘82, but was unsuccessful. Isn’t this the type of law that keeps Ameren a nice, friendly monopoly rather than the scary, bags-o-money, monocle-wearing Mr. Monopoly?

Ameren claims that unless it is allowed to charge customers for construction as it goes, it will not be able to afford the plant and meet the demand for electricity.

What really bugs me is this: If Ameren is claiming it will have to charge us for plants not even in operation, how is it going to finance 15-percent renewable energy by 2021 if Proposition C passes? Perhaps in this current volatile economy, a multibillion dollar nuclear plant — or, for that matter, a massive renewable energy standard — isn’t in the state’s best interest.

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9 Comments »

“Perhaps in this current volatile economy, a multibillion dollar nuclear plant — or, for that matter, a massive renewable energy standard — isn’t in the state’s best interest.”

I’ll agree that a nuclear plant is not in Missouri’s best interest but not because of the economy.

We need a renewable energy standard because it creates jobs, helps the environment and lessens our dependence on fossil fuels. My only regret is that the law does not exclude nuclear as “renewable.”

Technologies such as concentrated solar, photovoltaic, wind and even geothermal could easily be brought online in Missouri to meet the 15-percent standard. Coupled with the fact that when you decommission any of the aforementioned power generating facilities there is no environmental remediation problem. You don’t have to wait 75 years for the last rods to cool in the ponds and you don’t have to wait 25,000 years for the byproducts to become inert.

As the old saying goes, when the only tool you have is a hammer every problem looks like a nail. Unfortunately Ameren only has a nuclear hammer in its toolbox.

Comment by Mark — October 21, 2008 @ 9:53 a.m.
First, the law, or rather the proposed law, does exclude nuclear. Here’s a link from the Missouri Clean Energy website with the ballot language.

http://www.missouricleanenergy.org/docs/Ballot_Language_Explained.pdf

You’ll see in 393.1025 part 4, it specifically says nuclear is not included in renewable energy. I’m not so much arguing a point here, but more so just making sure we have all the facts straight.

Now, while I would love to see an energy independent Missouri with zero carbon emissions, I do believe we have to pick the right time to expand our renewable energy portfolio. In an economy such as today, vigorous energy expansion should not be the state government’s focus.

You will see from my former blog posts that I do not believe Proposition C to be the seamless law that everyone is making it out to be. Any government mandate on a business is going to have downfalls. Especially when the mandate includes a cap on rate increases. Combine that with the current law preventing rate increases for CWIPs, and there are going to be hidden costs.

Now I’m not just picking on renewable energy here either. As you can see from the above blog posts, I feel Ameren and other power companies need to be hesitant with any large project that could pass costs onto consumers.

Comment by Jacob Voss — October 21, 2008 @ 10:35 a.m.
Ameren should do all it can to move forward with an expansion of the nuclear plant and should be allowed to increase prices to pay for much of it. Everyone would benefit from the expansion once it is completed. As a regulated utility, Ameren will not be allowed to realize the full profit from the plant once it is complete, i.e. they will still have rates approved by the utility commission. There is nothing wrong with customers paying more now for something that will benefit everyone in Eastern Missouri.

Comment by David Stokes — October 21, 2008 @ 10:58 a.m.
Thanks for setting me straight about the “nuclear option” in prop C Jason. I was going on the word of someone who was campaigning in favor of the issue. I guess I’ve relearned the lesson to always read things for myself!

I agree government mandates can be detrimental sometimes, but in this case I believe the good outweighs the bad.

Comment by Mark Forsythe — October 21, 2008 @ 11:05 a.m.
And that’s all I was hoping to do with my study of Prop C, leave it up to the voters to decide, but give them a view from both sides of the issue. According to our editor, the commentary I wrote about Prop C should be available on the Show-Me Institute main website later this afternoon.

Comment by Jacob Voss — October 21, 2008 @ 11:32 a.m.
I’m going to have to cast my lot in with David Stokes here. I was very excited when I learned that MO might be getting a second Nuclear plant. In terms of carbon emissions, Nuclear power is vastly superior to MO’s currently dominant Coal power. And whereas renewables each carry efficiency limiting risks, nuclear power is tried and true, just ask France. It is a shame that power is provided by a government monopoly, but that doesn’t mean that they should be forbidden from moving forward. A new nuclear plant would be great.

Comment by Josh Smith — October 21, 2008 @ 12:32 p.m.
What’s stopping them from moving forward is the financial burden of borrowing vast amounts of capital. The point I am making here is that the current law preventing Ameren from charging customers the costs of future capital investments is sound. There is no law keeping Ameren from privately funding the 2nd plant. Frankly, I see the emissions and ethical aspect of this issue as a front to derail the entire argument. The current law, preventing Ameren from charging customers for CWIPs, was put into place for this exact situation– preventing Ameren for charging customers the costs they themselves could not afford.

Comment by Jacob Voss — October 21, 2008 @ 12:42 p.m.
The current law was also put into place as part of an overall strategy by opponents to derail the first nuclear plant. Luckily, the overall strategy failed, though obviously that part succeeded.

Comment by David Stokes — October 21, 2008 @ 1:25 p.m.
I believe NOW is the best time to add additional/replacement nuclear capacity at Callaway. Missouri needs the jobs. Ameren and the midwest will need the additional CLEAN energy that this new nuclear power plant will bring. I will take NUCLEAR over COAL (no matter how clean people tell you this might be… COAL IS NOT CLEAN).

Comment by J Luley — April 1, 2009 @ 5:48 p.m.

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“Perhaps in this current volatile economy, a multibillion dollar nuclear plant — or, for that matter, a massive renewable energy standard — isn’t in the state’s best interest.”

I’ll agree that a nuclear plant is not in Missouri’s best interest but not because of the economy.

We need a renewable energy standard because it creates jobs, helps the environment and lessens our dependence on fossil fuels. My only regret is that the law does not exclude nuclear as “renewable.”

Technologies such as concentrated solar, photovoltaic, wind and even geothermal could easily be brought online in Missouri to meet the 15-percent standard. Coupled with the fact that when you decommission any of the aforementioned power generating facilities there is no environmental remediation problem. You don’t have to wait 75 years for the last rods to cool in the ponds and you don’t have to wait 25,000 years for the byproducts to become inert.

As the old saying goes, when the only tool you have is a hammer every problem looks like a nail. Unfortunately Ameren only has a nuclear hammer in its toolbox.

Comment by Mark — October 21, 2008 @ 9:53 a.m.

First, the law, or rather the proposed law, does exclude nuclear. Here’s a link from the Missouri Clean Energy website with the ballot language.

http://www.missouricleanenergy.org/docs/Ballot_Language_Explained.pdf

You’ll see in 393.1025 part 4, it specifically says nuclear is not included in renewable energy. I’m not so much arguing a point here, but more so just making sure we have all the facts straight.

Now, while I would love to see an energy independent Missouri with zero carbon emissions, I do believe we have to pick the right time to expand our renewable energy portfolio. In an economy such as today, vigorous energy expansion should not be the state government’s focus.

You will see from my former blog posts that I do not believe Proposition C to be the seamless law that everyone is making it out to be. Any government mandate on a business is going to have downfalls. Especially when the mandate includes a cap on rate increases. Combine that with the current law preventing rate increases for CWIPs, and there are going to be hidden costs.

Now I’m not just picking on renewable energy here either. As you can see from the above blog posts, I feel Ameren and other power companies need to be hesitant with any large project that could pass costs onto consumers.

Comment by Jacob Voss — October 21, 2008 @ 10:35 a.m.

Ameren should do all it can to move forward with an expansion of the nuclear plant and should be allowed to increase prices to pay for much of it. Everyone would benefit from the expansion once it is completed. As a regulated utility, Ameren will not be allowed to realize the full profit from the plant once it is complete, i.e. they will still have rates approved by the utility commission. There is nothing wrong with customers paying more now for something that will benefit everyone in Eastern Missouri.

Comment by David Stokes — October 21, 2008 @ 10:58 a.m.

Thanks for setting me straight about the “nuclear option” in prop C Jason. I was going on the word of someone who was campaigning in favor of the issue. I guess I’ve relearned the lesson to always read things for myself!

I agree government mandates can be detrimental sometimes, but in this case I believe the good outweighs the bad.

Comment by Mark Forsythe — October 21, 2008 @ 11:05 a.m.

And that’s all I was hoping to do with my study of Prop C, leave it up to the voters to decide, but give them a view from both sides of the issue. According to our editor, the commentary I wrote about Prop C should be available on the Show-Me Institute main website later this afternoon.

Comment by Jacob Voss — October 21, 2008 @ 11:32 a.m.

I’m going to have to cast my lot in with David Stokes here. I was very excited when I learned that MO might be getting a second Nuclear plant. In terms of carbon emissions, Nuclear power is vastly superior to MO’s currently dominant Coal power. And whereas renewables each carry efficiency limiting risks, nuclear power is tried and true, just ask France. It is a shame that power is provided by a government monopoly, but that doesn’t mean that they should be forbidden from moving forward. A new nuclear plant would be great.

Comment by Josh Smith — October 21, 2008 @ 12:32 p.m.

What’s stopping them from moving forward is the financial burden of borrowing vast amounts of capital. The point I am making here is that the current law preventing Ameren from charging customers the costs of future capital investments is sound. There is no law keeping Ameren from privately funding the 2nd plant. Frankly, I see the emissions and ethical aspect of this issue as a front to derail the entire argument. The current law, preventing Ameren from charging customers for CWIPs, was put into place for this exact situation– preventing Ameren for charging customers the costs they themselves could not afford.

Comment by Jacob Voss — October 21, 2008 @ 12:42 p.m.

The current law was also put into place as part of an overall strategy by opponents to derail the first nuclear plant. Luckily, the overall strategy failed, though obviously that part succeeded.

Comment by David Stokes — October 21, 2008 @ 1:25 p.m.

I believe NOW is the best time to add additional/replacement nuclear capacity at Callaway. Missouri needs the jobs. Ameren and the midwest will need the additional CLEAN energy that this new nuclear power plant will bring. I will take NUCLEAR over COAL (no matter how clean people tell you this might be… COAL IS NOT CLEAN).

Comment by J Luley — April 1, 2009 @ 5:48 p.m.

October 20, 2008