Thursday, March 10, 2011
Missouri needs to build another nuclear power plant to secure a low-cost power source for years to come, freshman state Sen. Mike Kehoe told a Senate committee late Wednesday afternoon, at the start of a more than five-hour hearing.
During the public testimoney near the end of the hearing, Phillip Todd, Holts Summit, told the committee: “We’ve got to do something, because the longer we sit, we’re just going to fall behind and fall behind.”
But a spokesman for the Missouri Coalition for the Environment told the same panel that nuclear power is the most expensive option around.
“The free market gave up on the nuclear market years ago,” testified Ed Smith, the group’s “No CWIP Coordinator.”
Dick Bosch, a retiree, said: “I just ask that you keep in mind that any rate increases that you have really affect senior citizens — even small ones.”
At issue is whether lawmakers should approve a plan to allow Ameren Missouri or another electric utility to charge ratepayers for the costs of successfully winning a U.S. Nuclear Regulatory Commission early site permit for a possible future nuclear plant.
Missouri’s current “Construction Work In Progress” law, that voters approved in 1976, prohibits utilities from passing those costs on to consumers until after a power plant is operating.
Former state Sen. Joan Bray, D-University City, is now chairwoman of the Consumers Council of Missouri.
“We don’t like the idea of repealing a law passed by the voters in 1976,” she said. “But we live in political reality — we understand that Ameren is powerful and can get things done in the Capitol.
“If Ameren is going to get what it wants — we need to get what we want.”
Over the years, Kehoe said, “Our need for energy has only grown more.”
Warner Baxter, Ameren Missouri’s president and CEO, told the Senate’s Veterans’ Affairs, Emerging Issues, Pensions and Urban Affairs Committee: “Over the last 20 years, our energy demand went up 50 percent, (and) we expect another 20 percent increase in the next 20 years.”
But 80 percent of Missouri’s electricity comes from coal, which “continues to be under attack” for political and environmental reasons, said Kehoe, R-Jefferson City. “And most of our coal-fired plants are near to Social Security ... most are about 40 years old.”
Nuclear energy provides the best option for future energy production, he said.
Baxter said: “Not having this option will expose our customers to higher rates.”
But Mark Haim, of the group Missourians for Safe Energy, noted no new nuclear power plants are being built in the United States.
“It’s a lemon technology,” Haim said.
Kehoe has introduced two bills to help Ameren Missouri or another utility provider to seek the early site permit.
The committee heard testimony on both Kehoe’s bill and a separate plan sponsored by Chairman Jason Crowell, R-Cape Girardeau.
Kehoe’s bill would allow an investor-owned utility to charge ratepayers for the costs of winning that permit.
“There is no cost recovery until a permit is gained,” Kehoe explained. “And there are two clawback features” requiring refunds to the ratepayers if a site permit is sold or if the utility doesn’t build a plant after winning a permit.
Kehoe noted the proposal is supported by all of the state’s investor-owned utilities and 39 electric co-operatives.
“There are hundreds of businesses who are behind it,” he said, who have “invested in Missouri and they’re staying in Missouri.”
Crowell said his bill covers most of the same issues as Kehoe’s plan.
“I think the biggest difference between my bill and Sen. Kehoe’s is the Office of Public Counsel funding,” Crowell said.
His bill would fund the OPC — created in 1974 to represent consumers in Public Service Commission rate cases — with an assessment against the utilities which they pass along to their customers.
During public testimony, Linda Covelli, St. Charles, a disabled senior, opposed Crowell’s bill because it raises costs for seniors on fixed incomes, who already face rising health care costs.
Kehoe’s bill doesn’t cover public counsel funding, but he told the committee he’s willing to discuss options to make sure there is better funding for that office — although he’s against “an additional tax on customers’ bills.”
With Gov. Jay Nixon’s support, the utilities and co-ops last year formed a coalition to support the early site permit approach.
None of them endorsed Crowell’s idea of paying for the public counsel through assessments on utility bills, although they didn’t reject it outright.
“I think (Kehoe’s bill) provides a more positive environment for investors than your bill,” William Downey, president of Kansas City Power and Light Co., told Crowell.
Baxter said he’s not sure the OPC should be part of the early site permit bill.
“It really is not tied to this bill,” Baxter testified. “It is a broader policy issue. ... My concern is more that a bill with a 500 percent increase (for the Office of Public Counsel) will pass the Senate.”
However, Bray told Crowell his bill is “a true compromise.”
Bray’s group is part of FERAF, the Fair Electric Rates Action Fund.
Steve Spinner, energy procurement director for St. Louis-based Anheuser-Busch Breweries, told the committee: “Every one of the industrial and retail businesses here faces competition. ... Unfortunately, monopolies don’t face the same kinds of pressure.”
Spinner and others from FERAF noted Ameren Missouri has sought more than $1 billion in rate increases, but received only about 25 percent of that.
Baxter and several others testified that Missouri has the seventh-lowest electric rates in the nation.
Jefferson City businessman Mike Farmer, whose company includes a new Portland Cement-making plant in Hannibal, agreed: “We do get data from the Portland Cement Association.
“On benchmarking the costs ... we are way below the national average.”
Anytime his kiln is shut down, Farmer said, it costs several hundred-thousand dollars “to get it back up and running.”
A future nuclear power plant would help create a more reliable electric supply, he said.