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Legislation filed to pave way for second Callaway reactor

Legislation filed to pave way for second Callaway reactor

December 8th, 2010 in News

Legislation authorizing the first step for a second reactor at the Callaway Nuclear Power Plant was introduced Monday by Sen.-elect Mike Kehoe, R-Jefferson City.

Kehoe will represent Callaway County and four other counties in Missouri's Sixth Senatorial District when he takes office on Jan. 5 to replace retiring Sen. Carl Vogel, R-Jefferson City.

Last month Gov. Jay Nixon announced that Kehoe and Rep. Jeanie Riddle, R-Mokane, will be leading efforts to approve the legislation that would begin the process to construct a second nuclear power plant in Callaway County.

Nixon also announced an agreement has been reached with a consortium of public and private Missouri electric utilities - including rural power cooperatives and city-owned utilities - that have agreed to support an early site permit for a second nuclear reactor at the Callaway plant.

Ameren Missouri officials have made clear the St. Louis-based firm has not yet decided whether to build a second nuclear power plant. But seeking a site permit is time consuming and could take up to four years. For this reason, Ameren Missouri is supporting efforts to secure a site permit because it would shorten the time period needed to build a nuclear power plant if it should decide on the nuclear option to meet its growing need for electrical power. Other utilities also have expressed an interest in building a second nuclear reactor at the plant. Joint ownership of nuclear power plants is common in the United States and it makes financing them much easier.

The entire process for creating a second nuclear reactor at the Callaway plant - including a site permit, license for a reactor, construction and securing an operating permit - can take from 13 to 15 years.

Kehoe said the legislation he prefiled Monday, Senate Bill 50, will be known as the Missouri Energy Partnership Act because of its immediate impact for job creation, coupled with its long-term goal of protecting consumers.

Under the bill, starting on Oct. 1, 2011, any electric company seeking an early site permit in Missouri from the Nuclear Regulatory Commission must also submit reports to the Missouri Public Service Commission every six months. The reports must document the work completed and costs incurred up to that point and the costs remaining.

Kehoe noted the legislation he offered does not repeal existing law approved by voters in an initiative petition in 1976 that prohibits utilities from charging customers for costs related to construction work before the plant generates electricity.

Kehoe said his bill instead would give investor-owned utilities like Ameren Missouri the same authority - but only after a permit is granted and only if the Missouri Public Service Commission determines the expenditures for the permit are prudent - to recover costs that rural electrical cooperatives and municipal utilities are now able to recover.

The cost of obtaining a nuclear site permit, Kehoe said, is about $40 million. He said the cost to consumers would be between eight and 16 cents per month and charges over a period not to exceed 20 years.

Under Kehoe's bill, all electric companies participating in the early site permit are allowed to defray their costs through rates and charges over 20 years. But if an electric company has recovered its charges for an early site permit and subsequently sold or transferred the permit, the company must refund its rate payers up to the amount the company collected from rate payers for the permit.

Under his bill, Kehoe specifies that if the total cost of obtaining an early site permit for a nuclear plant is expected to exceed $40 million, the company must include an explanation in its reports to support why expenditures beyond $40 million are prudent.

"This is a small investment worth making to ensure that we keep rates low in the future," Kehoe said. The nuclear plant also would create thousand of new jobs and inject millions of dollars into the economy, Kehoe said.

Kehoe's proposed legislation also requires oversight and regular reporting of work and expenditures, both completed and forecasted, and mandates additional information to demonstrate whether or not forecasted costs exceed a pre-determined cap.

Dollars collected for the site permit would be returned to consumers if the permit is sold to another company.

Nuclear Regulatory Commission officials have said a nuclear site permit has many specific details limited to one site and a permit could not be sold for the purpose of moving it to another location. But if the ownership changed for the permit and the location remained the permit might be able to be modified if the new owner is qualified.

In announcing his new bill, Kehoe also offered support for the Office of Public Counsel, a state agency that represents the interests of consumers in utility rate cases decided by the Missouri Public Service Commission.

"The Office of Public Counsel needs the resources to fulfill its role of representing the interests of the public and utility customers in proceedings before the Missouri Public Service Commission and in appeals in the courts. Throughout the upcoming budget process, I will work with all the stakeholders to make sure that the Office of Public Counsel is properly funded," Kehoe said.

Utilities from around the state are supporting the nuclear option legislation because they fear a crackdown by the federal government on coal-fired power plants, which create most of the electricity now generated in Missouri.

"Missouri has a lot of aging power plants that we are going to have to replace in the near future," Kehoe said. "Combine this aging fleet with likely burdensome Environmental Protection Agency regulations and it becomes critical that we build more nuclear power generation capacity for Missourians. This is a measured step that will move through the process one step at a time and with transparency."