This article first appeared in the St. Louis Beacon, Nov. 19, 2010 - Gov. Jay Nixon flew around the state Friday in an unusual blitz to launch a campaign for a second nuclear power plant in Missouri.
Under his plan, supported by a consortium of energy providers, the state Legislature would need to approve a proposal that the governor says would provide financial support for the power plant without forcing ratepayers to foot the bill during construction.
The proposed legislation would let Ameren Missouri recover its costs of obtaining an early permit for the site, but it would not let the utility get construction money from ratepayers until the plant began turning out power.
At his St. Louis stop, Nixon told several hundred labor leaders and rank-and-file union members that the project would "create thousands of good-paying jobs" and help ease the double-digit unemployment now plaguing the building trades.
"If this goes right, there will be a lot of food on a lot of tables," the governor said, igniting cheers.
He added that a second nuclear plant also would guarantee that Missouri, which already has the seventh-lowest energy rate in the country, would continue to have plenty of low-cost power for its residents and businesses.
Nixon, who got his start in politics as an environmentalist and consumer advocate, also asserted that nuclear power was a safe alternative to fossil fuels and that the new plant would feature the latest advances in energy efficiency and safety.
The new plan makes sure, he said, that "consumers are protected."
This latest proposal has, for the moment, generated a cautious but conciliatory response from a business coalition that had opposed an earlier measure that would have imposed rate hikes on consumers.
"We are happy the governor is starting the conversation about ways to generate sustainable, low-cost energy and look forward to working with him and members of the General Assembly on provisions important to consumers," said David Overfelt, president of the Fair Electricity Rate Action Fund (FERAF).
Overfelt's group had been a vocal opponent of earlier efforts by Ameren Missouri to build a second plant on the site of its existing nuclear facility in Callaway County. That plan was defeated in the Legislature, largely because the utility wanted to rescind a rule that prohibited it from charging customers for construction works in progress, known as CWIP.
Missouri voters approved the ban on CWIP in 1976 by a ratio of nearly 2 to 1.
Nixon emphasized repeatedly Friday that the CWIP ban would not need to be changed under this latest plan.
"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," the governor said.
Energy Demands Continue to Grow
Nixon said the compromise would help put the state in a good position to build a new generation of nuclear plant that he said would be safe, clean and affordable.
"I want the state of Missouri to be a net energy exporter, to make more power than we use," he said. "I don't ever want to be a governor that has anybody in their state who walks to the side of the room to try to turn on a light -- and it doesn't come on."
Concluded Nixon: "We've going to be on the offense here."
When asked later, a spokeswoman for Ameren Missouri said that the state's electrical usage now varies widely, depending on the time of day, the season, the weather and industrial usage. Sometimes the state consumes more than produces, and other times it is an energy exporter.
But what's not in doubt, said spokeswoman Susan Gallagher, is that Ameren's Missouri customers now consume 50 percent more energy than they did 20 years ago. In the next 20 years, Ameren predicts that usuage will be up another 20-25 percent -- which is why the company is looking again at creating more nuclear power.
The permit process could take up to three years, the company says. And if a permit is issued, Ameren would havbe 20 years to build a plant.
Nixon acknowledged that, even under the best-case scenario, construction of the plant was years away. But he added, "the sooner the process is started, the sooner our state will reap the rewards."
Nixon called the proposed location for the new Calloway plant "an outstanding site."
Nixon, a Democrat, noted that Republicans will sponsor the plan in the GOP-controlled Legislature. Republican state Sen.-elect Mike Kehoe, a Jefferson City car dealer whose district includes Callaway County, would introduce the bill that lays out the provisions. Rep. Jeanie Riddle, R-Mokane, earlier has said she would push the effort in the House.
Nixon was joined for Friday's flyaround by Ameren Missouri president Warner Baxter, who underscored his support of the new plan -- and emphasized the other energy partners involved. The list includes Associated Electric Cooperative, Empire District Electric, the Association of Missouri Electric Cooperatives, Kansas City Power & Light and the Missouri Public Utility Alliance.
Energy providers around the state, said Baxter, are facing similar problems. "We have aging power plants, 45-plus years old," he said. The companies also are facing more federal environmental regulations, particularly on the use of coal-fired plants. Baxter said that makes nuclear power more attractive.
Baxter praised labor for its support of the plan and pledged to continue working together.
He made no mention of Ameren's earlier unsuccessful efforts.
Fallout from the Unsuccessful 2009 Fight Lingers
Legislation that failed to win approval in 2009 not only would have overturned the ban on CWIP financing but would have truncated the procedure under which the Public Service Commission reviews and approves requests for rate increases while power plants are being built. It also would have limited the PSC's ability to revisit any decisions once they were made.
Ameren said at the time that without the change in CWIP, it could not afford the second plant.
Consumer advocates objected to such changes. Their main argument was that Ameren shareholders, not utility customers, should be the ones to shoulder the cost of a new nuclear plant -- estimated at that time to be $6 billion, plus another $3 billion for financing.
The Fair Energy Rate Action Fund also was formed, representing many large industrial users of electric power -- notably Noranda Aluminum in southeast Missouri -- which opposed changing CWIP. The St. Louis area members include Anheuser-Busch.
After the legislation's rejection, Ameren officials said they were suspending plans for a second nuclear plant. But they also said they were keeping alive their application to the Nuclear Regulatory Commission for the facility, although they told the agency essentially to stop active consideration of it.
Earlier this year, another bill was introduced late in the legislative session that would have achieved many of the same goals of the 2009 bill. It didn't go anywhere, and an Ameren spokesman said at the time that the utility had nothing to do with the effort.
Today, the Fair Energy Rate Action Fund (FERAF) laid out several provisions that it says would "ensure Missouri consumer protections are strengthened" in the latest plan sought by Nixon.
The ideas include:
- A stronger, and better funded, state Office of Public Counsel, which the group says has been hampered by cuts in state spending for consumer protection. As a result, FERAF said, the Public Service Commission has at times been unable to conduct "adequate reviews of rate case filings."
- "A reasonable and fair cap on rate increases to keep energy costs from spiraling out of control. To ensure consumers' money is well spent, each step of the construction process should be monitored and controlled."
- A rebate if "ratepayers pay tens of millions of dollars in rate increases and a plant is never built or the permit is sold at a profit. Missouri ratepayers deserve to be refunded in full."
"FERAF has worked in partnership with thousands of consumers around the state to support pro-consumer measures that result in lower energy costs for all Missourians." said the group's spokesman Danny Pfeifer.
Two months ago, the group proposed its Rate Payers Bill of Rights, described as "a set of policies that would ensure fair, transparent rate making and ultimately lower energy costs for all Missourians."
A key provision would require utility shareholders to foot more of the bill for the construction of new facilities or improvements.
After Friday's news conference in St. Louis, labor leaders were buoyant about the possible jobs. Jeff Aboussie, assistant secretary-treasurer for the Greater St. Louis Building Trades and Construction Council -- which hosted the event -- portrayed the plan as "a huge job creation measure."
Aboussie lauded Ameren as "an excellent partner," and said the proposed project would involve thousands of St. Louis area workers. The jurisdiction for most of the region's unions include Calloway County, where the plant would be built.
Even if construction is years away, he added, "This is one step closer to putting thousands of people back to work."
