Grassroots organizations speak out on CWIP
The bill would tax ratepayers for a new nuclear plant before it is built.
Published Feb. 5, 2009
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Peter Bradford, a former member of the U.S. Nuclear Regulatory Commission, speaks Tuesday against a bill in the Missouri Senate that would fund a new nuclear plant by raising utility rates. The bill would repeal a ban on charging customers for construction work in progress.
A former member of the U.S. Nuclear Regulatory Commission spoke Feb. 3 in Columbia against charging electrical ratepayers for the construction of a new nuclear plant in Callaway County before it is built.
Former NRC Commissioner Peter Bradford addressed a group of citizens and advocacy groups, saying the Missouri Senate bill introduced in January amounts to allowing electrical utility AmerenUE to use government power to unfairly take citizens' money.
"If you're in a business that is very shaky in this economy, especially if it's concerned with electricity, the chances are low that your business will be around in 15 to 20 years," Bradford said. "Of course, we will be."
The bill, called the Missouri Clean and Renewable Energy Construction Act, repeals a 1976 law that banned charging electrical ratepayers for construction work in progress, CWIP.
The main risks of building a nuclear power plant, Bradford said, are the utility canceling the plant, overrunning on costs, building a plant that does not function properly or being rendered obsolete by new technologies.
If it is made law, consumers would still pay for the plant if the electric company decides not to build it, as long at the decision not to build is "reasonable," the bill's online summary stated.
Sen. Delbert Scott, R-Lowry City, the bill's main sponsor, said it includes provisions that would keep ratepayers safe from these risks.
"The additional oversight by the Missouri Public Services Commission would take care of that," Scott said.
If the bill is passed, utilities must apply to the PSC, who will decide whether or not preconstruction costs are prudent and can be recovered through an increase in consumer rates, according to the summary.
Scott said without CWIP the overall cost of construction to consumers would be about $1 billion above the plant's projections, due to financing costs. He said paying for the project as it goes would protect consumers from a huge rate spike after the plant's completion.
"The cost of energy is going to go up, regardless if we do nothing or if we do this," Scott said. "This is the best long-term proposal, I think."
Missourians for Safe Energy Co-Founder Mark Haim said at the meeting there were other options for dealing with Missouri's energy needs.
"Renewable energy sources don't need CWIP financing," Haim said.
The bill does not extend CWIP financing only to nuclear plants. Low carbon-emitting coal, wind, solar and biomass power plants are also included.
Missourians for Safe Energy opposes CWIP both because of the consumer impact and because of its immediate impact on the construction of Callaway 2. Representatives from AARP, Grass Roots Organizing and the Consumer Council of Missouri oppose the bill because of its potential effects on consumers.
John Coffman, a lawyer for the CCM, said the bill would create an economic imbalance between AmerenUE, its shareholders and its ratepayers. He said the council was concerned with the bill's effects on consumers, not with the type of power supplied.
"Of the bad ideas I've seen in Missouri, this one takes the cake," Coffman said. "Every so often we have to stand up and tell those people in power who hired them."
For now, senators on the Commerce, Consumer Protection, Energy and the Environment Committee have yet to set a date for the bill's hearing.
A spokesman for the committee's chairman, Sen. Brad Lager, R-Savannah, said the bill's hearing date would be announced this week.
