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01.23.2009 9:00 pm

AmerenUE feigns nuclear indecision

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This editorial is just a place holder. We haven’t decided yet whether to write about one of the biggest issues facing Missouri legislators this year.
Our colleague Tony Messenger did. In a column published Tuesday, Mr. Messenger wrote that executives from utility giant AmerenUE danced around the “gorilla in the room” when they briefed lawmakers on energy issues.
That gorilla would be a new nuclear reactor the utility applied to build in Callaway County. Strictly as an option, of course.
“No decision has yet been made,” utility lobbyist Matthew Forck insisted. It’s the same line utility executives have used for months.
We wouldn’t want to jump the gun. But if we did decide to write about the issue, we’d mention that AmerenUE filed an 8,000-page application to build the plant with the U.S. Nuclear Regulatory Commission last July. It expects the facility to cost at least $6 billion.
AmerenUE asked state utility regulators for a rate hike that includes between $5 million and $7 million a year to pay for the application. The company spent about $50 million on it last year.
Maybe it’s just us, but we wouldn’t spend $50 million and fill out an 8,000-page application unless we were pretty sure we were going ahead.

There may be a good reason to spend that much money. As Mr. Forck told state senators, “nuclear (power) could be the option that is best for Missouri.”
But the only way to build it — according to House Speaker Ron Richard, R-Joplin, and Sen. Delbert Scott, R-Lowry City — is to repeal an important consumer protection law that voters enacted in 1976.
The law prohibits utilities from charging customers for the cost of building new power plants until those facilities begin to produce electricity. It’s commonly known as an “anti-CWIP law.” CWIP stands for construction work in progress.
Perhaps it was Mr. Richard and Mr. Scott who jumped the gun. AmerenUE executives have said they won’t make a final decision to build the plant — assuming there is a plant, or plans for a plant, which we’re not saying there are or are not — until at least 2011, assuming there is a 2011.
AmerenUE executives and the Public Service Commission don’t even want to discuss alternative ways to pay for the plant, assuming there is a plant and assuming the commission still is interested in public service, which we very much doubt.

Still, Mr. Richard and Mr. Scott want to repeal the anti-CWIP law this year. Mr. Richard proposed doing it as part of a package he’s calling the “Family Recovery Plan.” He never mentioned consumer protection or how higher electric bills would help anyone recover. He talked about creating jobs instead.
Mr. Scott introduced a bill to repeal the anti-CWIP law. He calls it the “Missouri Clean and Renewable Energy Construction Act.” It’s an environmental issue, see?
Here’s something they decided not to mention: Ameren and its executives gave more than $300,000 to political candidates during last year’s election campaign. At least $7,500 went to Mr. Richard. Mr. Scott got $150 from an Ameren lobbyist.
Speaking of which, Irl L. Scissors — a longtime advocate of environmental causes — announced he’s switching sides. He’s now working to repeal the anti-CWIP law. Boy, is he going to be embarrassed when he finds out there’s no real plan to build a plant.
Utility executives are sophisticated businessmen. They don’t throw money around unless they think it’ll earn some kind of return.
Legislators and electric customers are sophisticated, too, although they don’t always get credit for it. They know $50 million plus $300,000 equals one new nuclear plant coming down the pike.
We’ll be sure to point that out if we decide to write the editorial. We expect to make up our minds pretty soon.
Good thing, too. The suspense is killing us.

5 comments

Comments are closed.

It’s not all that complicated. Ameren is saying that Callaway II is needed, and they’d like to place an order for the equipment..which takes several years to build…but they don’t have the ability to make the down payment to whoever is going to build it for them.

Without CWIP it’s not going to be built. It’s that simple. Why? Because Ameren can’t go out and borrow the equivalent of 125% of their total capitalization based on an unknown ability to repay the loan. They want to know, up front, whether the income stream to repay the loan is going to exist before they bankrupt themselves.

Nobody wants to see their rates go up. That’s a given. If, however, the lights go out because the rates that are being paid are insufficient to increase capacity to meet the demand, will those who sit on the sidelines saying “NO!” look in the mirror?

— hs
6:52 am January 24th, 2009

Funny thing … you mention a $150 donation to a Republican, but not a word about the more than $19,000 that Nixon got from Ameren. Just an innocent oversight, I’m sure.

— Nick Kasoff
7:35 am January 24th, 2009

hs,

A third option would be for AmerenUE to negotiate an agreement with consumer groups (including large industrial customers, who have asked the PSC to open a case on the new plant), the Public Counsel’s office and the PSC. That’s what Aquila did. It allowed that utility to maintain the cash flow it needs while building a new plant.

If the numbers truly favor Ameren’s argument, then it should be willing to make its case with the PSC, who have access to all kinds of experts on utility financing.

Nick,

Is Jay Nixon trying to repeal the anti-CWIP law? I wasn’t aware of that. If I had, I’d have searched out his Ameren donations, too.

— John G. Carlton
3:33 pm January 24th, 2009

from the comments it sounds like John Carlton ,wrote this piece. what research did he do as to the facts in his placeholder? Can’t Ameren sell the license if they don’t build ? Also from what i understand there is no law currently in Mo. that allows for the type of financing proposed by opc and aarp. on Tv it was reported that this bill also legalizes propsoals made by OPC and AARP that may not be legal and gives several financing options .shouldn’t you research that in order to report accurately on this issue ?? or has John already made up his mind and not let the facts get in the way .

— rj
9:05 am January 25th, 2009

Throw a little more coal on the fire until they can build another coal fired plant. We are the Saudi Arabia of coal, not likely to run out for years. We had better contact our representatives and put a stop to this changing of the law. Don’t tell me about global warming. I just read about 600 or so scientists who signed a document saying global warming was a farce. 1998 was the warmest year ON RECORD and it’s been getting cooler ever since. They are saying 2008 had the coolest avg. temp. in years. Guess what, they figure it was because there were no big sun spots in 2008. Imagine that, the sun causing “global warming”, who’d a thunk it. That must explain why the ice caps on Mars, where they don’t burn coal or drive suv’s, are also melting.

— big John
2:31 pm January 25th, 2009