Boone County candidates weigh in on new nuclear plant

COLUMBIA — State legislative candidates in Boone County are weighing in on whether to rewrite a 1976 consumer protection law that AmerenUE has targeted as a barrier to financing a second nuclear power plant in Callaway County.

The state law, passed by a voter referendum, does not allow electric utilities to adjust customer rates before the project begins providing customers electricity. Increasing customer rates for a service before it is provided is called charging for construction work in progress.

AmerenUE wants state lawmakers to rewrite the law and allow the utility to begin billing customers while the construction is in progress.

The law is expected to be on the table in the 2009 legislative session.

Both candidates in the hotly contested 24th District support the second reactor and favor changing the law.

“This is the single largest construction project in the history of Missouri,” incumbent Ed Robb, R-Columbia, said. Opponent Chris Kelly, a Democrat, said changing the law will be the single most important non-budgetary item facing the legislature next year.

AmerenUE spokesman Mike Cleary and John Coffman, the general counsel for the nongovernmental consumer advocate organization Consumers Council of Missouri, represent different views of whether charging for construction work in progress would be economically beneficial for customers.

Cleary said it would be financially difficult to construct the multibillion-dollar plant if the law isn't rewritten. He said charging customers for construction work in progress would raise the monthly rates of AmerenUE's customers. But the changes, he said, would make interest rate payments less and reduce the price of the plant by $2 billion to $3 billion.

Cleary said there is no specific cost estimate for Callaway 2. But, he said a rough estimate for a new nuclear power plant funded with construction work in progress charges would cost about $6 billion. If the plant was funded without construction work in progress charges, it would be about $9 billion, he said.

Coffman said construction work in progress charges would make Callaway 2 more expensive. He said these charges would provide less incentive for AmerenUE not to go over a projected budget, creating a situation with a greater chance of excessive expenditures tied to rate increases. He said these costs could be “hundreds of millions of dollars more” than original cost estimates.

In July, AmerenUE sent a letter of application to the U.S. Nuclear Regulatory Commission to build Callaway 2. Cleary said the commission would probably decide on the application by 2012. AmerenUE, Cleary said, may decide to proceed with construction at the time of approval or in the year before.

If construction began in 2012, the plant could be online by 2018 to 2020, Cleary said.

Cleary added that AmerenUE hopes state legislators will rewrite the 1976 law during the 2009 state legislative session. To overturn the law, a bill would need to be passed by a majority of the legislature and signed by the governor.

Coffman said his organization has sent questionnaires to all of Missouri’s House of Representatives and Senate candidates asking their opinion about the law. Although the majority of the surveys haven’t been collected, Coffman said, the majority of respondents have been against the charges.

Boone County candidates running in contested November elections are attracted by the economic and energy benefits Callaway 2 could bring to Callaway County and Missouri.

Almost 400 workers would be needed to supply an adequate workforce at Callaway 2, Cleary said. During the construction phase, which could last six to 10 years, about $115 million in tax revenue would be generated, he said.

Rep. Steve Hobbs of the 21st House District said Missouri’s low energy prices make it attractive for out-of-state businesses looking to set up shop and that Callaway 2 would keep this attraction alive.

Hobbs, R-Mexico, said the new reactor would address the energy needs of Missouri 20 to 30 years down the road.

According to the AmerenUE Web site, Callaway 2 could generate 1,600 megawatts of energy every year, enough electricity for more than 1 million homes. The existing Callaway County nuclear reactor generates 1,190 megawatts of electricity per year, enough for about 780,000 Missouri and Illinois households.

Robb and 19th District state Senate candidate Kurt Schaefer, R-Columbia, said the nuclear plant would provide a clean source of energy.

Some Boone County candidates and officeholders think the reactor is necessary but differ on whether customers should be charged for construction work in progress. Some would support construction work in progress; some would be more hesitant and support the charges if they became the only way to fund the plant; and some haven’t formed an opinion.

Cleary said it’s impossible to know how much construction work in progress charges would affect monthly rates, because many plant expenditures could change by the time construction would begin.

Lewis Mills, the Missouri Public Counsel, who represents consumer interests on behalf of the state, said it’s difficult at this time to estimate the cost of the plant because there aren’t accurate calculations for length of construction, loan rates and material costs.

Coffman said the 1976 law helped lower the cost of the first Callaway plant, which went online in 1985.

Cleary said the cost of Callaway’s first reactor, which totaled about $3 billion, went over the projected budget by $1 billion because AmerenUE couldn’t charge for construction work in progress.