Nuclear plant bill has “soft cap” of $40 million cost
JEFFERSON CITY — When supporters of building a second nuclear reactor at Ameren Missouri’s Callaway County facility said the debate in the Legislature over the issue this year would be different than the last attempt, they were right.
Sen.-elect Mike Kehoe, R-Jefferson City, has released the proposed wording for the bill that would allow an exception to Missouri’s ban against electrical corporations charging consumers for costs related to a new facility until it is up and running. And unlike 2009, this year’s bill is just a few paragraphs, compared to that year’s nearly 30-page opus.
But the simplicity of the bill will also raise its own questions. For instance, when Gov. Jay Nixon announced his support for the proposal a couple of weeks ago, he indicated there would likely be a cap on costs to the state of $40 million and that his support is predicated on a coalition of utilities in the state backing the proposal.
Kehoe’s bill lists the $40 million as more of a soft cap. The bill only allows a utility company to obtain its costs for a site permit for a nuclear reactor, not construction costs. But the bill also says that if the electrical corporation can show the Public Service Commission that its costs above $40 million are “prudent” they con obtain those also.
“The word ‘prudent’ is important,” Kehoe said. “It takes a little bit of effort to get there.”
Kehoe said the governor’s office is working on a memo of understanding between a coalition of utility companies in Missouri that plan to be a partner with Ameren Missouri in building the nuclear plant.
The Post-Dispatch has filed a Sunshine Law request seeking that memorandum of understanding.
“The coalition will, in a perfect world, be financial partners,” Kehoe said. “Their intent is to have skin in the game.” Kehoe’s bill would allow any members of that coalition who reimburse Ameren Missouri for costs associated with the site permit pass on those costs to their consumers. The idea is that consumers across Missouri would share the expense, thus decreasing the increase in utility rates that Ameren Missouri’s customers would otherwise see.
Consumer groups have said they want to see more money for the Office of Public Counsel in a bill to allow the utilities to finance the site permit with consumer help. The public counsel represents consumer interests before the Public Service Commission.
The bill makes no mention of new funding for Office of Public Counsel. Both Kehoe and Nixon have said they support that additional funding.
Here’s what Kehoe’s bill says:
AN ACT
To repeal section 393.135, RSMo, and to enact in lieu thereof one new section relating to site development for energy generation facilities.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF MISSOURI, AS FOLLOWS:
Section A. Section 393.135, RSMo, is repealed and one new section enacted in lieu thereof, to be known as section 393.135, to read as follows:
393.135. 1. Any charge made or demanded by an electrical corporation for service, or in connection therewith, which is based on the costs of construction in progress upon any existing or new facility of the electrical corporation, or any other cost associated with owning, operating, maintaining, or financing any property before it is fully operational and used for service, is unjust and unreasonable, and is prohibited.
2. Starting on October 1, 2011, an electrical corporation seeking an early site permit from the U.S. Nuclear Regulatory Commission or a successor organization shall submit monitoring reports to the public service commission every six months documenting work completed, total expenditures to date, work yet to be completed, and anticipated expenditures yet to be incurred in order to obtain the early site permit. If total expenditures to obtain the early site permit are forecasted to exceed forty million dollars, the electrical corporation shall include in these monitoring reports an explanation of why it is prudent for the electrical corporation to incur expenditures in excess of that amount in order to obtain an early site permit.
3. Notwithstanding the provisions of subsection 1 of this section, recovery of the prudently incurred expenditures identified in subsection 2 of this section shall be provided through the rates or charges of the electrical corporation seeking the early site permit or through the rates or charges of an electrical corporation that contributed to the expenditures for the early site permit, over a period not to exceed twenty years. These rates or charges shall include a return on the remaining balance of such expenditures at an annual rate equal to the applicable electrical corporation’s commission-approved return on rate base until such expenditures are recovered, and shall commence with the effective date of tariffs approved by the commission in the applicable electrical corporation’s first general rate proceeding following the date on which the early site permit referenced in subsection 2 of this section is obtained.
4. If the electrical corporation that sought the early site permit, or an electrical corporation that contributed toward the expenditures for the early site permit, has recovered from ratepayers expenditures for the early site permit pursuant to subsection 3 of this section, and then subsequently sells or transfers some or all of its interest in the early site permit, or subsequently receives reimbursement for the expenditures it has contributed, the electrical corporation shall refund to ratepayers that part of the money received from the sale, transfer, or reimbursement up to the amount of such expenditures that it has recovered from ratepayers.
-Tony Messenger
