Proposed bill would fund Callaway nuclear plant

Opponents say ratepayers shouldn't finance utilities they're not using.

By Juana Summers

Published Jan. 27, 2009

Correction appended

While a St. Louis-based utility company takes initial steps toward new sources of energy, a Missouri legislator is trying to make financing energy fiscally simpler.

Sen. Delbert Scott, R-Lowry City, proposed a bill that would change the way utilities fund potential construction projects. The bill is a part of the growing controversy surrounding building an additional power plant in Callaway County.

Scott's bill, which has been initially read in the Senate and has no co-sponsors, would allow for financing costs of alternative forms of energy, such as nuclear, wind and solar energy, to be paid by consumer costs prior to the construction of a new plant.

This proposal, Scott said, would allow energy companies in the state to meet the growing needs of consumers easier. It would modify a voter-enacted law known as CWIP, or Construction Work In Progress, passed in 1976 to keep utility providers from charging customers before in-progress building projects were completed.

Scott said he understands voters' choices in 1976, but he believes the initial vote was based on unwillingness to use nuclear energy, not an opposition to the economic realities.

"When this law was passed by voters, it was an anti-energy vote," Scott said. "It's a different age. This is a different issue."

The first nuclear plant in Callaway was completed in 1984 with the CWIP provisions intact.

Rep. Chris Kelly, D-Columbia, said that while he supports the construction of the power plant, he thinks that the manner in which provisions for the new plant are being made is a problem.

"Politically, it is a mistake for the legislature to shove a change down the people's throats," Kelly said.

Kelly said that the measure will likely come to a vote based on the mounting opposition to changing CWIP, and that it makes more sense for the legislature to bring the changes to a vote to be consistent with the will of the voters.

In a release from Missourians for Fair Electric Rates, a group of organizations that opposes CWIP changes, AARP attorney John Coffman said the new bill would allow utility providers to charge customers for utilities they are not getting.

"It's simply incredible that the electric monopolies are unnecessarily raising rates during a recession when people are already struggling to pay their bills," Coffman said.

Those economic conditions, AmerenUE spokesman Mike Cleary said, would make it impossible to build a new plant without changes to CWIP policies to allow financing costs to be paid before the plant is actually completed.

Cleary said even if Scott's bill becomes law, it doesn't mean the plant would necessarily be built. That decision will not be made until 2011 at the earliest, he said.

"Everything we've done up until this point was to preserve the option of building," he said. "We have to get that process started now."

Cleary said it's unclear how much consumers would pay initially if changes were made to the state's CWIP policy.

"All the construction costs and all the financing costs would have to accumulate, and then we would have to charge customers," he said.

He compared building a potential new plant without changes to CWIP policies to "having a credit card and not making payments for several years" because the plant's financing and building costs would not be paid until after the plant came online.

In addition to making changes to CWIP policies for building additional plants, the legislation would give additional power to the Missouri Public Service Commission to oversee expenditures.