Debate over Missouri nuclear legislation heats up

Wednesday, February 4, 2009 | 11:49 a.m. CST

JEFFERSON CITY — A former federal nuclear regulator said Tuesday that letting Missouri utilities charge electric customers for the costs of building power plants while construction is under way could cost as many jobs as would be created.

Legislation in the state Senate would reverse existing Missouri law requiring utilities to wait until a new plant is online and producing electricity before charging customers for the cost of building the new facility.

Peter Bradford, who served on the Nuclear Regulatory Commission from 1977 to 1982, said the change would raise electric bills for business and residential customers and reduce the money available for creating jobs and spurring economic development.

"Raising electric rates ... is an eccentric way to create jobs in the state," said Bradford, who also served on state utility regulation boards in Maine and New York.

The bill by Sen. Delbert Scott, R-Lowry City, would let utilities charge for the financing expenses of building plants using nuclear, new coal technologies and renewable energy sources such as wind and solar.

Debate over paying for new power plants was triggered by an application from St. Louis-based AmerenUE to build a second nuclear reactor in mid-Missouri.

Consumer activists and environmentalists believe customers shouldn't be billed until new plants come online. Utilities and a coalition of labor and cleaner power advocates say companies can't afford to build the billion-dollar plants without recouping costs during construction.

Speaking at a seminar sponsored by the group Missourians for Fair Electric Rates, which opposes Scott's bill, Bradford disputed proponents' assertion that customers would save money by paying during construction instead of getting a large rate bump at the end.

Bradford said that argument doesn't account for customers who won't be around when a new plant starts operating, nor for the possible investments customers could make with their money that instead would go toward a new power plant.

The Missouri Energy Development Association, a trade group for Ameren and other Missouri investor-owned utilities, estimates that electric customers' rates would increase between 1 percent and 3 percent annually and just over 10 percent during the entire project.

That figure is based on a construction project taking about six years with Ameren able to get smaller electric cooperatives and municipal utilities to buy an ownership stake in the second reactor.

Earlier Tuesday, supporters of the Scott's bill made rounds throughout the Capitol to argue their case: Allowing customers to be charged during construction is the only way to pay for large, clean energy projects.

Irl Scissors, who had represented an environmental group opposed to the bill, is now the executive director for Missourians for a Balanced Energy Future, which was created to help support Scott's bill.

Scissors said Missouri is heavily dependent on coal for producing electricity. He said Scott's bill — in addition to allowing a new nuclear plant — could help expand alternative energy sources such as wind and solar power.

At issue is a 1976 ballot measure that Missourians approved by a roughly two-thirds majority. The law still lets utilities recover debt and financing from their customer but not until after a new plant is producing power.

AmerenUE Chief Executive Officer Thomas Voss has said the utility cannot afford to build a second reactor without changes to the 1976 Missouri law.

Building a second nuclear reactor is estimated to cost about $9 billion, which some lawmakers contend would be an economic development boon to the organized labor and the state amid the recession. AmerenUE has not yet decided whether to build a second reactor but has submitted an application to the Nuclear Regulatory Commission.

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