CWIP in crisis
In only his first few months of service in the Missouri Senate, Republican Kurt Schaefer of Columbia has demonstrated extraordinary leadership. Not because he is able to bulldoze his way through the murky tangle of legislative politics but because he seeks smart ways to reach worthwhile goals and is willing to work unusually hard to get them adopted.
No better example exists than his work on the CWIP repeal legislation that unfortunately has become the most controversial issue in this year’s session.
AmerenUE, the privately owned St. Louis utility that operates the Callaway Nuclear Plant near Fulton, drafted legislation to remove an existing statutory ban on higher utility rates to help pay for financing costs of power plants under construction. The ban had been adopted in 1976 during the fear-mongering earlier days of our experience with nuclear power. Now we know this method is safe, efficient and carbon-free.
So Ameren decided to seek federal permission to build Callaway 2 next door to the first plant, but financing costs for the $6 billion project are simply too steep to postpone for the five or six years it would take for the power plant to go online, so the utility seeks a repeal of the intolerable “construction work in progress” ban.
This initiative makes sense. It would spread costs over a longer period and avoid a lot of interest cost, fiscal facts of life that would allow the state Public Service Commission to ultimately allow lower overall cost recapture from customers. Regardless of this underwriting advantage, the bottom line is the plant simply can’t be built without recovering some of the financing costs as construction progresses.
Thanks primarily to Sen. Schaefer’s hard compromise work, repeal seemed on the move, but now a small group of senators threatens to filibuster the bill to death, frustrating Schaefer and the majority that seems ready to move ahead with the Callaway project.
A major reason for the filibuster is the opposition of Noranda Aluminum, Ameren’s largest electricity customer, which is working hard to defeat CWIP repeal because it fears a subsequent rate hike. Noranda’s senator, Robert Mayer, R-Dexter, says if repeal passes, the plant will have to close and 900 jobs will be lost. One can’t blame Noranda for wanting the lowest electric rates it can get, but this sort of threat is not a valid way to set rates or decide the CWIP issue. Surely CWIP can be repealed without putting Noranda out of business. Surely Ameren will want to preserve its largest customer.
However, Mayer and eight others were ready to talk all night, so the bill had to be taken off the table. Let us pray it re-emerges and can be passed.
Now is the time to build Callaway 2 while federal loan guarantees and tax credits are available. It would be the largest construction project ever undertaken in Missouri, employing about 2,500 highly paid workers for five or six years and several hundred after that to operate the plant. Nuclear power is the best large-scale, environmentally friendly production option available. We’d be fools not to exploit it.
Schaefer’s compromise bill gives the Public Service Commission power to oversee rate increases. Taxpayers routinely pay for public infrastructure before projects are completed. Rates will not increase nearly as much as scaremongers claim. The widespread public benefit of Callaway 2 would be enormous.
If the filibuster threat continues, the Senate should consider calling for the previous question to end the stalemate and allow a vote. This is an unusual tactic usually avoided to allow individual senators their veto prerogative. Occasionally the value of progress overrides the value of minority stalemate. This is one of those times.
HJW III
An egotist is a person of low taste, more interested in himself than in me.
” AMBROSE BIERCE
