Wednesday, March 23, 2011
A consortium of public and private utilities in Missouri is vital to Missouri’s energy future and it may become a model to be emulated throughout the nation, Sen. Mike Kehoe, R-Jefferson City, said Monday in Fulton.
“There are people from Washington, D.C., and the world who are watching this partnership,” Kehoe said. It is extremely unusual to have electric cooperatives working with private power utilities on the same legislation along with representatives of city-owned utilities throughout the state, he said.
Kehoe said all electric providers in the state are represented by the coalition because they realize how vital it is for them to have a nuclear option as a power source in the future.
Kehoe’s comments came during a town hall meeting on nuclear power in Fulton that included Rep. Jeanie Riddle, R-Mokane, and representatives of Ameren Missouri. The town hall event, hosted by the Callaway Patriots Tea Party at the Callaway Electric Cooperative, attracted about 50 Callaway County residents.
Kehoe said another legislative proposal has been offered by the Missouri Senate leadership that threatens to destroy the partnership of utilities seeking the option of building a second nuclear reactor at the Callaway Nuclear Power Plant.
Kehoe said no action has been taken on his proposal in a Senate Committee backed by the state’s private and public utilities.
Sen. Jason Crowell, R-Cape Girardeau, is chairman of the committee holding Kehoe’s bill. On March 1 Crowell and Senate Leader Robert N. Mayer, R-Dexter, jointly introduced another bill permitting a private utility to recover up to $40 million for obtaining an early site nuclear permit and a rebate to consumers if a nuclear plant is not built. It also requires utilities to fund the Office of Public Counsel in the Missouri Public Service Commission, the panel that represents consumers in rate cases before the PSC.
Kehoe said the Crowell-Mayer proposal would require utilities to fund an agency that works against them in rate cases and it would increase the cost of operating the agency from $700,000 a year to $4.1 million a year and allow the agency to hire 40 or more employees.
“The opponents of this bill want layers and layers of bureaucracy because they know that this may kill it. It appeals to some people who feel we need more government. It’s really aggravating to me when people do things for political gain rather than what is right for the people,” Kehoe said.
Kehoe said Riddle’s nuclear bill was assigned to the Utilities Committee in the House and his bill in the Senate was assigned to the Veterans Affairs Committee. “I do what I can for veterans but that’s not the proper place for a bill for a site permit for nuclear energy. However, we played in that sandbox and we had a great hearing in the Senate. We had 275 people testify on my bill and 257 testified in favor of it. We had representatives of cooperatives, citizens, retired people and educators. It wasn’t just Callaway and Cole County people. It was people from all over the state who understand Missouri’s energy needs,” Kehoe said.
Mayer and Crowell are both from Southeast Missouri where Noranda Aluminum Inc. operates a huge aluminum smelter. Noranda is the largest industrial electricity customer of Ameren Missouri. A Noranda representative testified against the nuclear plant bill last year, saying the firm feared its electricity rates would increase in the short term.
Kehoe said opponents of his bill are chief executive officers of a few big companies interested in short-term profits and the expense of the future. He said they don’t care about what their successor CEO’s must face, only their own profit margins while they are CEO’s.
Kehoe said the management officers of Noranda don’t live in Missouri but are trying to dictate policy in Missouri.
Kehoe said he doesn’t want to compromise his bill to the point where it would lose support of the statewide consortium of private utilities, cooperatives and municipal utilities.
Kehoe said the Missouri consortium realizes a nuclear option is vital to the future of the state. “It’s because a decision was made in the 1970s to build a nuclear power plant that we have the seventh lowest electric rates of anywhere in the United States,” Kehoe said.
Rep. Jeanie Riddle, R-Mokane, said all of the electric providers in the state have come forward to speak with one voice that they need this nuclear project. “All of the utilities in the state are saying we need additional power and we need nuclear to be a part of our portfolio. If the legislative body at the Capitol does not listen to what they have to say, then we force them to look outside of Missouri for the power that we need in Missouri. That would mean another state would decide whether you have power today or not in the future. It might even be from another country. Texas is buying power from Mexico. Do you want Mexico to decide your power needs? I don’t. Sen. Kehoe and I believe this is one of the most important pieces of legislation to be considered this year in the Missouri General Assembly. But it is not necessarily in the forefront because of political agendas.”
Riddle said the legislation is vital to the state’s future economy. The legislation she offered in the House is being held to determine what develops in the Senate, Riddle said. She said her bill will be altered to match Sen. Kehoe’s bill if it is approved in the Senate.
Tom Howard, Callaway Electric Cooperative general manager, said rural cooperatives have teamed up with Ameren Missouri, other private utilities in the state, and city-operated utilities to seek the legislation giving the consortium the option of building a second nuclear reactor to help meet their energy needs in the future.
Howard said cooperatives in Missouri now rely 80 percent on coal-fired plants to generate electricity.
“The chances of these plants being around five years from now is not assured. They may be gone because of environmental pressures and costs. Ten years from now if the nuclear plant is built, all of the coal-fired plants will be ready to be retired. We have to find something to replace our coal-fired plants for base-load generation because they are getting old,” Howard said.
“I think the cooperatives in the nation need to take credit for killing cap and trade. Although cap and trade may be dead, greenhouse gas emissions is alive and well. The EPA is our major enemy,” Howard said.
Howard said nuclear power is the best answer to solving greenhouse gas emissions and he believes the legislation offered by Sen. Kehoe for a nuclear site permit will be invaluable in a few years if federal loan guarantees are offered to help build nuclear power plants. This would lower the cost of financing nuclear plants.
“Plants not only have to be safe, they also have to be reliable,” Howard said. “It’s not how long do we keep the lights on, but in what order do we turn people off. We don’t like to talk about those plans, but they exist. The Midwest has been blessed with stable generation. California and Texas turn people off.”
Warren Wood, vice president of regulations and legislative affairs for Ameren Missouri, told the group how nuclear power plants work. He said the Callaway Nuclear Plant is able to withstand any conceivable natural disaster, including earthquakes and tornadoes. He said the plant also has spent millions of dollars to guarantee protection against a direct plane strike and potential attacks by terrorists.
He said the Callaway Nuclear Power Plant generates enough electricity to power 700,000 homes.
Wood said the American nuclear industry is watching the nuclear incidents in Japan unfold and he doesn’t believe their problems could occur at the Callaway Plant or at other American nuclear power plants.
Wood said the American nuclear industry is assessing this situation in Japan carefully and we will learn from it. He said the nuclear industry in the United States continues to learn new ways to make plants safer and is constantly improving equipment and procedures to make sure plants operate safely.
Wood pointed out that in Japan the plants shut down automatically as soon as the earthquake hit. He said the same thing would occur at the Callaway plant if a major earthquake hit this area.