Legislative action taking place in Missouri, Indiana, and Iowa

bid cover sheet The promise of carbon emission free electricity may be realized in three states that previously had few prospects for pursuing it.

On Feb 23 a Missouri House committee endorsed legislation that would allow utilities to charge customers for a portion of the costs of building a new nuclear power station.

On Feb 21 an Indian Senate committee gave a green light to encourage utilities to build new nuclear reactors and to recover some of the costs while the plant is being built.

In Iowa a Senate committee heard testimony from a utility executive that a small modular reactor design might make sense for the next nuclear plant in the state.

These actions come as the Obama Administration introduced a Department of Energy budget for 2012 that calls for an additional $36 billion in federal loan guarantees. At the same time, the Nuclear Energy Institute released public survey results showing 71% of people in the U.S. support use of nuclear energy in the nation’s energy portfolio.

Missouri shows the way

Missouri show meBy a vote of 21-2 the Missouri House Utilities Committee reported out a bill that will let power companies investing in a new reactor recover some of the costs of building it while construction is in progress.

If enacted into law, the measure could significantly reduce the financing costs of a second reactor at Ameren’s Callaway site in central Missouri. A 1976 bars such practices.

Last November with the support of Missouri Governor Jay Nixon, a group of utilities including Ameren and a half dozen others announced they would seek an early site permit for the second reactor. While consumer groups, and large industrial electricity users, oppose the bill, it appears the utilities have taken to heart their legislative loss on a similar measure in 2009.

William Baxter, Ameren CEO, told wire services there would be no request for an increase in rates for a new reactor until the early site permit was granted by the NRC and the Public Service Commission had conducted a review of the costs of the new power station.

Indiana seeks energy to grow

indianaDespite strong opposition from environmental groups, senior citizens, and rate payers, an Indiana Senate Committee voted 6-2 to approve a legislative measure that would allow utilities building a new nuclear reactor to recover the costs while it was under construction.

State Sen. Beverly Gard said during a heated and long hearing that people need to be realistic about energy.

“You want power,” she said, “It is not going to fall out of the sky for free.”

There are no nuclear power plants in the state. Construction on one in southern Indian was abandoned in the 1980s after huge cost overruns. The Indiana Energy Association told the news media none of its members have plans to build a new reactor in the near future.

Sen. Brandt Hershman, one of the bill’s sponsors, said it is needed to make the state attractive for nuclear energy. And Stan Pinegar, president of the Indian Energy Association, agreed that without changes to the law, it would be very difficult to built a new reactor in the state.

The bill also has measures that benefit coal plants which derive their fuel from the state’s abundant reserves. These measures were criticized by environmental groups such as the Sierra Club who said they would stifle investment in alternative energy projects like wind and solar.

Iowa may pursue small modular reactors

William Fehrman, president of Des Moines based MidAmerican Energy, told an Iowa legislative committee in January that construction of a small modular reactor (SMRs), e.g., one with less than 300 MW, might be an answer to the question of how to meet the state’s future energy needs. He said the utility is “taking a serious look at them.”

He cited two advantages. The first is the lower cost. At $4,000/Kw a 125 MW plant would cost $600 million compared to the capital outlays required for a 1,000 MW plant. Also, he said that the SMRs, when built in modular fashion, can go off the grid one-at-a-time without impacting state-wide electricity supply.

In meantime, the Iowa legislature is also considering a measure that would allow a utility building a new nuclear reactor to recover costs while it is under construction. Iowa is currently studying the impact on rates of such a change in the law. The two-year study will be completed in Fall 2011.

Iowa has one nuclear reactor. It is the Duane Arnold 580 MW BWR, completed in 1975, and located near Cedar Rapids, Iowa.