Ameren suspends plans for new plant
When Tom Voss asked the Missouri Legislature for help to build another nuclear power plant, the AmerenUE chief executive promised high-paying jobs to help turn around Missouri’s moribund economy.
Pressed by lawmakers, however, Voss acknowledged that even with new legislation, the prospects of a multibillion-dollar nuclear plant — which could take a decade to build — were 25 percent at best.
Now that Ameren’s favored legislation has died, Voss is saying that the nuclear plant option is dead, too. Thursday morning, Voss said the company is suspending its efforts to build a second nuclear plant in Callaway County.
Proponents of the nuclear plant say Missouri missed a critical opportunity to meet its long-term energy needs with a source of power that is cleaner than facilities that burn coal or natural gas. Opponents say the proposed legislation would not adequately protect consumers from double-digit rate increases.
Voss said the legislative effort was about finding a cost-effective funding mechanism to the best power alternative available. "We developed a bill that we thought was the minimum we needed to provide financial certainty," he said. "We are stepping away from the nuclear option at this time."
Stepping away, however, is in the eye of the beholder.
"We’ll take that with a grain of salt," said Kathleen Logan Smith of the St. Louis-based Missouri Coalition for the Environment.
Smith and other AmerenUE critics, including consumer lobbyist John Coffman, say the plant was already several years down the road, meaning there’s nothing to stop the utility from restarting its efforts. After all, Coffman noted, AmerenUE told lawmakers it would not make a decision on whether to build Callaway 2 until at least 2011.
"They’d still have two more sessions after this one to work on legislation," said Coffman, the representative of AARP and Consumers Council of Missouri.
The plant was estimated to cost $6 billion to $9 billion and produce at least 3,000 union jobs during construction. AmerenUE pushed a bill that would have allowed it to charge consumers up front for certain costs of the new facility even before it was operating, saving millions of dollars in financing costs.
But critics say the proposal would have tilted the regulatory playing field in AmerenUE’s direction at the expense of consumers. "What I suspect is that they have a multiyear campaign to change how the Public Service Commission sets rates," Coffman said. "They’re going to continue to hammer away at this legislation."
In fact, AmerenUE is keeping the door open to nuclear power.
The investor-owned utility has not decided whether to pull its application for a nuclear permit with the Nuclear Regulatory Commission, spokeswoman Susan Gallagher said Thursday payday loan help. That application, made in July 2008, is one of 17 pending before the NRC.
The nuclear construction industry has been largely dormant in the U.S. for about 20 years, and now several states are considering changes to laws similar to the bill that died in the Missouri Legislature. Florida, South Carolina and Georgia already passed such laws.
But some utility companies, including AmerenUE, are hoping to wait out the first set of projects and learn from whatever mistakes are made. Last month, AmerenUE executive Scott Bond told USA Today that the company did not want "to be in the first wave of plants."
That point of view was heavily emphasized by critics who said the Legislature did not need to rush the proposal. Voss said the company would not seek new legislation next year.
At a news conference at an energy summit in Columbia, Mo., on Thursday morning, Gov. Jay Nixon criticized the company for not obtaining a nuclear permit before seeking a change in state law.
"I had hoped that everyone involved would have looked at this as a two-step process," Nixon said, adding, "I don’t think Ameren has ever absorbed that point."
At his news conference, Nixon announced a new plan to encourage energy conservation in state government. Both Voss and his critics agree on that theme: With the nuclear option off the table, conservation has to be a part of AmerenUE’s strategy.
Voss has maintained that without the second nuclear plant, the company would pursue new gas-fired power plants. They are cheaper to build because they are much smaller in scale, but the cost of natural gas fluctuates and is unpredictable, leading to potential rate spikes for consumers.
Missourians have among the lowest utility rates in the country, in part because of the state’s dependence on coal. But new Environmental Protection Agency regulations on carbon emissions make it unlikely any new coal plants will be built soon, and they might lead to price hikes to pay for pollution from existing plants.
That’s one reason why AmerenUE was pushing nuclear power.
"This was the least-cost option," Voss said. "All the other options are more expensive."
Some environmental groups, however, argue that AmerenUE is predicting unrealistic energy growth.
"If they’re serious about pursuing conservation and renewables, then we’re ready to talk," said Smith of the environmental coalition. "Let’s find some real answers here."
Filed under: money by Fred