Ameren, Westinghouse nuclear deal could clear political path
Ameren Missouri and Westinghouse Electric Co. are teaming up to seek more than $450 million in federal money to license and develop small-scale, next generation nuclear reactors at the Callaway plant site outside of Fulton.
Gov. Jay Nixon joined executives from the companies as well as other Missouri utility officials and state officials for the announcement Thursday afternoon on the lawn of the governor’s mansion.
For St. Louis-based Ameren, the Westinghouse partnership marks yet another twist in the years-long effort to generate public and political support for development of a second nuclear plant at the Callaway site.
In 2010, the utility went so far as seeking federal loan guarantees, applying for a construction and operating license to build a 1,600-megawatt Areva nuclear reactor, and making reservations for steel forgings to be manufactured in Japan, before suspending the whole effort in the face of political and consumer opposition.
Ameren spent the past year-and-a-half lobbying for a measure that would have enabled it to pass along millions of dollars in costs to consumers to pay for costs of seeking an early site permit from the Nuclear Regulatory Commission. That effort, too, generated a backlash.
Ameren Missouri Chief Executive Officer Warner L. Baxter said the utility would ditch those efforts for now forges ahead with Westinghouse, a nuclear industry stalwart owned by Toshiba, to try for Department of Energy funding that would support licensing of small reactors at the Callaway site.
Baxter said federal financing would “give us the ability to save Missourians millions of dollars in licensing costs.”
Ameren Missouri is vying to be the first utility in the country to seek a construction and operating license for a small-scale nuclear reactor, a technology that’s appealing to utilities because of the smaller upfront costs and shorter development lead times.
The small reactors, about a fourth or less the capacity of full-size nuclear units, are appealing to the nuclear industry because they could be manufactured at a central plant and shipped around the world. By contrast, building nuclear reactors today is a more cumbersome process that must be done largely on site and takes years.
For Nixon, who has supported efforts over the past year and a half to develop a second nuclear plant in central Missouri to stimulate jobs, said the opportunity presented by a Westinghouse-Ameren alliance goes beyond just another power plant. It could be the first step toward making Missouri a hub for engineering and manufacturing next-generation nuclear technology, he said.
“Projects don’t get any bigger than this one,” Nixon said during the news conference. “This project can spark a new global industry right here in the Show-Me State.”
Legislators such as Rep. Jeanie Riddle, R-Mokane, and Sen. Mike Kehoe, R-Jefferson City, who championed legislation to advance nuclear development in Missouri, were equally encouraged.
“We have to have a plan for the future,” said Rep. Jeanie Riddle, R-Mokane, whose district includes Ameren’s Callaway plant. “I think this is great – the possibilities it creates for us.”
There are, of course, a lot of steps to completing a new nuclear reactor – something that hasn’t been accomplished in the United States for decades. Establishing a new industry in the state almost from scratch represents an exponentially bigger feat.
For now, Ameren and Westinghouse are focused on competing for the $452 million in federal funds available to support engineering, design certifications and licensing of two small reactors at the Callaway site.
The Department of Energy last month announced the availability of the funds to support efforts to make the United States a leader in designing and building smaller-scale nuclear plants and expanding options for nuclear power.
Westinghouse and Ameren said they plan to submit an application by mid-May. A decision is expected this summer. If successful, Ameren would then apply to the Nuclear Regulatory Commission for a license that would authorize a nuclear power plant to be built and operated at the Callaway site.
However, such a license wouldn’t obligate Ameren to actually build a new plant. In fact, utility executives continue to maintain that they’re merely trying to preserve options for meeting electricity needs as the utility’s coal fleet continues to age and environmental regulations aimed at cutting pollution from coal-fired power plants become more stringent.
“We strongly believe when we look to the future that maintaining options is the best course of action for our state,” Baxter said. “We think we need to have a diverse portfolio and we think nuclear should be part of that portfolio.”
The Westinghouse small modular reactors are 225-megawatt units that are based on the technology used in the company’s larger AP 1000 nuclear reactors, which have already been licensed by the Nuclear Regulatory Commission and are planned for sites in Georgia and South Carolina.
Eight Westinghouse AP1000 units are already being constructed, including four in China. The first is expected to come online in 2013. The first of four units being built in the United States is expected to come online in 2016.
Pittsburgh-based Westinghouse said it chose Missouri as the location to develop the small-scale nuclear reactors because of Ameren’s experience in operating a nuclear plant and strong support from the state, university resources and an alliance of other electricity providers. The state’s central location with access to truck, rail and barge transportation is also a big plus.
“It’s an ideal location with reach across the U.S.,” said Kate Jackson, a Westinghouse senior vice president and chief technology officer.
Politically, Thursday’s announcement ends months of debate over how to finance nuclear plant development in Missouri – for now. That’s welcome news for legislators who wanted to see Ameren develop the plant and create jobs, but were concerned about the impact on consumers amid rising electricity rates and a sluggish economy.
“I’ve never been opposed to the expansion of nuclear power. It was just the details of how we got there,” said Senate President Pro Tem Rob Mayer, R-Dexter. “I’m hopeful now that Ameren can move forward without needing any additional funding from ratepayers.”
But even if Ameren and Westinghouse get the federal grant, and licensing and development goes as planned, the path to building more nuclear power in Missouri could still go through the General Assembly.
State law prohibits utilities from charging consumers for new power plants until the facilities are actually generating electricity. The so-called construction work in progress law (CWIP), which would have allowed for charging consumers upfront, has been at the center of the debate over nuclear power in Missouri. And the issue could re-surface if and when Ameren looks to finance construction.
Baxter wasn’t specific when asked if Ameren would later need to seek a repeal of the CWIP law to pay for construction of a small reactor.
“That remains to be seen,” Baxter said. “Ultimately, to build a nuclear plant, you need a regulatory framework that would be supportive of these types of long term investments.”
Elizabeth Crisp and Virginia Young of the Post-Dispatch contributed to this story.
-Jeffrey Tomich
