AmerenUE hopes to convince legislators to rescind the 1976 law that prevents utilities from funding expansions by charging current customers to pay for the financing and interest charges for projects that are still under construction. The law was passed by voters in a referendum as part of an attempt by anti-nuclear power activists to stop the construction of the first Callaway Nuclear Generating Station.
Whether Missourians voted for this ban on construction-work-in-progress out of opposition to nuclear power or, more likely, a desire to keep electric bills lower, the proposition was not placed on the ballot because of a carefully considered economic objection tothis type of financing plan in general. Rather, it was part of a serious effort specifically targeted at blocking the construction of a nuclear power plant.
Our attitudes toward nuclear power have changed during the past 33 years, thanks to decades of its successful use in the United States. President Barack Obama included a promise to “find ways to safely harness nuclear power” in his recent campaign stump speeches. According to Newsweek, nuclear power provides 20 percent of the power in America, but represents 70 percent of emission-free energy, according to Newsweek.
Building on those changes in attitude, AmerenUE hopes to initiate the second phase of the Callaway plant, which was originally planned for the 1970s but delayed in no small part because of the law. Given the enormous cost of constructing a new nuclear reactor, and the financing difficulties inherent in today’s economic climate, AmerenUE cannot build Callaway II while those financing laws remains in place. So, while issues involving nuclear regulation are usually quite complex, the choice facing Missouri is fairly simple: allow AmerenUE to charge existing customers — you and I — to fund Callaway II; or keep the regulations and do without a new nuclear power plant, eliminating one opportunity to reduce dependence on fossil fuels.
If the status quo were a viable option, this might not be a difficult choice — but Missouri’s ever-increasing power needs must be met. Nuclear power is the best means of addressing the energy needs of tomorrow in a more efficient and environmentally-friendly manner than new coal-powered plants. Wind, solar and other alternative sources of power will not generate enough electricity in the foreseeable future to meet more than a small portion of our needs. And why choose between them, anyway? Fossil fuels can be phased out as we move toward a system primarily dependent on nuclear power for the baseload, with significant augmentation by wind and solar power for peak and standby loads. Baseload facilities require a level of reliability that alternative energy simply cannot yet provide.
Consumer advocates and supporters of thefinancing law have stated that its elimination would remove a powerful incentive for AmerenUE to control costs. This argument makes absolutely no sense. The same incentives to earn a return on investment will exist regardless of whether AmerenUE funds Callaway II by loans, bonds, customer charges, blackjack winnings or fairy dust — even though that return is regulated by the Public Service Commission. In fact, funding construction by charging current customers may save money for customers over the long run by lowering financing costs.
The debate over nuclear power has not ended. We must consider issues of waste storage and the potential for disaster whenever expansion is considered. However, opponents of nuclear power should debate these points on their merits in the regulatory and political realm, rather than stopping plant construction through financial gimmicks.
AmerenUE must build new generating capacity. It can build plants powered by fossil fuels, or it can expand nuclear power while limiting the required financing costs — as long as the financing law is repealed. Paying more now to save later may not be popular, but in this case it is the economically and environmentally responsible thing to do. These financing regulations and restrictions hamper our state’s ability to meet our energy needs and deserve to be eliminated.
David Stokes is a policy analyst at the Show-Me Institute, a Missouri-based think tank.