Missouri energy bill benefits ratepayers
Among the greatest challenges Americans face are those choices we make now that affect our future quality of life and that of our children and grandchildren. Yet these are choices we must make, particularly when it comes to our environmental and energy future.
Missourians are now wrestling with such a choice, as decision-makers consider a law that prohibits utilities from charging ratepayers for infrastructure before projects are completed. The issue is one of financial management and how to deal with the inevitable costs associated with bringing new power into the state or upgrading the current grid.
With the law that is currently being considered, the costs to build power plants of every type would be higher, which would make investment in necessary power generation more expensive and therefore less likely.
At stake today in Missouri is a proposed nuclear reactor “ along with thousands of jobs “ now planned for Fulton. AmerenUE, the company considering building the new reactor, wants to gradually increase monthly bills to save ratepayers an estimated $2 billion to $3 billion in borrowing costs. As in the case of prepaying a mortgage or car loan, savings come in the form of interest costs avoided.
The near-term impact on utility bills will be a couple of dollars a month to the average customer. In today’s economy, objection to any increase is an understandable reaction, but it is flawed.
Future energy of any sort will cost more. Some are saying that this is an “either/or” proposition: Either Missourians agree to have $2 dollars added to customers’ bills, or they pay nothing. In reality, the implications are much greater.
State decision-makers are in fact choosing whether Missourians pay a small amount now or pay much more later, when the state has to meet power demand in future years from energy sources that will almost surely be more expensive or more damaging to the environment, or both.
This is not an easy decision, but making prudent investments up front is the most economic choice for the people and businesses of Missouri. In Georgia, which last month approved a new law allowing such a “pay-it-forward” approach, the subsequent savings will amount to $300 million “ money that won’t have to come out of the pockets of ratepayers in future years.
Across the U.S., states are approving “pay-it-forward” approaches to cover the costs of new energy infrastructure projects, not just to save money, but as competition increases it can help to attract and retain energy-using businesses.
If utilities don’t start covering construction costs now, there’s something else Missouri won’t see for a while: new jobs. If AmerenUE is able to move forward with the new nuclear reactor, it will be one of the largest construction projects in Missouri’s history, requiring as many as 2,500 construction workers. Once finished, the new facility would permanently employ nearly 400 workers, with a total payroll of about $30 million per year.
Each of the more than 100 reactors in operation around the country contributes an estimated $430 million a year in total output for the local community, according to a report by the Clean and Safe Energy Coalition, which I lead along with Greenpeace co-founder Dr. Patrick Moore.
Moreover, nuclear power costs less on an operating basis than other sources, which is the best way to measure the worth of energy investments. In 2007 U.S. utilities spent an average of 1.76 cents to produce each kilowatt from nuclear energy, compared with 6.78 cents for natural gas, and 10.26 cents for petroleum. And nuclear plants aren’t subject to the same price volatility as these other sources.
All these economic benefits come with an environmental payoff as well. Nuclear power is carbon free, meaning it doesn’t contribute to global warming when it is producing power. The 9.3 million metric tons of carbon dioxide the existing Callaway reactor helped avoid in 2007 was equal to removing 409,000 cars from Missouri roads.
While carbon dioxide’s environmental costs are difficult to tabulate, they soon won’t be. President Barack Obama and Congress are fashioning new federal legislation that will put a cap on carbon emissions. Electricity produced by fossil fuels such as coal and oil will immediately ratchet up in price; while the cost of nuclear power won’t be affected.
Bottom line: Any efforts to boost energy production while cutting emissions is going to require nuclear energy along with conservation and renewables. Some say it’s risky to start paying for a nuclear power plant that hasn’t yet been built.
As a former governor who worked long hours to keep and bring new jobs to my state, I am convinced it is far more risky not to invest in a cost-effective, clean energy infrastructure.
Whitman, former federal Environmental Protection Agency administrator, is co-chair of the Clean and Safe Energy Coalition (CASEnergy), a national grassroots coalition which promotes the economic and environmental benefits of nuclear power. Go to www.cleansafeenergy.org
