Rep. Emery, CWIP is a mistake
May 03, 2010
To the editor:

There are books to be written on why CWIP is a mistake but here's a condensed version in response to Ed Emery's piece:

Thank you for the opportunity to air this issue where Missourians can make up their own minds. Missouri voters banned utilities from charging us for Construction Work in Progress (CWIP) in 1976. Last year alone our ban on CWIP saved us $50 million from being added to the rate base as the Public Service disallowed CWIP costs for Callaway II, the second proposed nuclear reactor Ameren wants at Callaway.

This is the Show Me State, so let's look at nuclear power and money. There are a few states already traveling on this nuclear road and it is worth noting how it's going for them.

Florida passed construction work in progress charges to fund construction of two new nuclear reactors in 2006. On May 1 just a year ago, Florida news outlets reported that Progress Energy, their nuclear-seeking utility had hiked rates 24% in January of 2009. Florida's Sen. Mike Fasano, a Republican from New Port Richey, was quoted as saying, “It really amazes me how shameless Progress Energy is. They have no consideration for the customer. None whatsoever. They can talk all they want about how they want to put the customers first. They have yet to put the customer first when it comes this issue.”

When public outrage ensued in Florida, it prompted the utility to soften hostilities with a more "modest" rate hike, which was followed by another "modest" rate hike. Progress Energy is now slowing work on their $17-22 billion nuke plant and slowing its hikes to customers as well - though they are still seeking a $164 million hike next year to cover work on the nuke plants. Their announcement about slowing down rate hikes came shortly after a lawsuit was brought by consumer groups that don't see the sense in paying $7 billion with no guarantee that the plant will ever be operational.

Paying in advance for power plants of course is an issue because dozens of nuclear power plants were never completed in the US the last time nuclear fever took hold. And with the world's leader in nuke plants, France, behind construction schedules and over budget on their latest round of showcase projects, it is not looking so good for the current wave of nuclear fever either.

That's Florida. Georgia's new nuclear plans just hit a snag as well. Friday, it was reported that, "The Court found that the Georgia Public Service Commission acted illegally in violation of Georgia state law. The Commission’s approval last year during the certification process for the proposed new Vogtle reactors is now in jeopardy." See "Southern Alliance for Clean Energy Wins Lawsuit" here.

How about closer to home? Illinois is America's biggest nuclear power state with about 48% of its power generated by nuclear reactors. Consumer advocates there say Commonwealth Edison's customers pay some of the highest electric bills in the Midwest because of their 13 nuclear plants (only 10 of which are operating but there are still bills associated with those unproductive plants). The 2010 average retail price of electricity in Illinois now is 35% higher than Missouri according to the U.S. Energy Information Administration's Statistics and Analysis.

Ameren customers in Illinois just endured another rate hike. In that case Ameren had originally requested a $226 million increase, which they subsequently reduced to a $162 million increase. Consumer advocates testified that Ameren did not need the rate hike and should instead cut their rates by $6 million, after the company reported more than doubling profits in Illinois in February. Ameren got a small rate hike anyway. See "Regulators chop Ameren III. rate hike request" here.

Representative Emery says he's just trying to save us money on interest charges on a new nuke plant. He uses as an example the purchase of a big screen TV- but whether it's a big screen TV, an ATV, or a Prius we're smart enough to see that it's not like a nuclear plant. If it's my TV at least I'm enjoying it. And I'm not about to pay for someone else's. If the shareholders want a nuclear power plant, they will own it and they can put the money up for it. We are not a bank.

The truth is our energy needs are not growing daily. Energy consumption has flat-lined in part because the economy is in the toilet. As we recall, it is in the toilet from a lack of regulation by the regulators like those that Emery would have us blindly trust. And in part, we are not seeing energy demand grow, even as the economy does, because more and more residents and businesses are taking advantage of cost-effective efficiency improvements. The utilities may wish energy needs were growing, but they are not.

Further, if our energy needs were growing, then it is clear that our elected officials are not doing their jobs in preparing for our energy future. Every energy policy analyst worth their degree agrees that the cheapest energy available is the energy that is already here. What that means to us is that basic, common sense energy efficiency measures could meet significant power needs if we will just step up and pick that low hanging fruit. Of course building more efficient buildings and businesses, upgrading systems in schools and hospitals and otherwise doing more with what we have will not allow Ameren to justify huge rate hikes, but it will put thousands of Missourians to work doing work that can't be outsourced, investing in our built environment, and saving people and businesses money.

Building a nuke plant will employ construction workers until it's done, then a few hundred thereafter, but investing even half of the cost of the plant (say $7.5 billion of the $15-20 billion) into efficiency will pay even bigger dividends without the expense of babysitting radioactive waste forever (an expense that is often conveniently left off the financial and carbon accounting ledgers).

It is time we empower Missourians- and put money in *our* pockets. The answers we get will depend on the questions we ask. The question "Where will we get our energy?" has a much different answer than "How can Ameren make the most profit?"

It is tragic that Iowa is committing $15 million in subsidies for nuclear power when that money could be spend to reduce the need for a nuclear power plant, putting Iowans to work, and really saving them money in the future. One of the biggest tragedies of choosing nuclear power is the amount of money it consumes, to the detriment of less risky, cleaner, leaner and much faster energy options.

Representative Emery assumes nuclear power is safe and reliable. Perhaps that is because we have not had an accident in the U.S. worse than the partial core meltdown at Three Mile Island. It is surely because he does not live in uranium mining country and seen the damage done to communities there. And because he does not live near a nuclear fuels processing facility where employees, nearby residents and the environment experience the impacts from cancer, leukemia, and birth defects. Perhaps from southwest Missouri, upriver and upwind, it seems safe. The simplest thing to consider might be these three points: there is no permanent, safe, reliable place to store spent nuclear fuel rods; nuclear power plants are not built to withstand terrorist attacks even today; and even if all goes well, we citizens have to pay to monitor nuclear materials *forever*- probably longer than it will take to pay off our national debt (in fact, it will keep adding to that debt).

And of course I agree that careful planning is required to meet our energy needs. However, that is not what is happening here. CWIP is about money and profits, not responsible, cost-effective energy development.

And though I appreciate the recognition from Representative Emery, CWIP is not about me. I'm not seeking public office. I'm just sounding the alarm about a policy that Missourians rejected 2-to-1 and for a good reason. This is about the pocketbooks of Missourians who can smell a rat and who flatly cannot afford to pay escalating Illinois-style electric bills so Ameren can post even more record profits. We can do better than CWIP- and we must.

Kathleen Logan Smith, St. Louis, Coalition for the Environment

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