Missouri Senators begin debate over nuclear plant bill

JEFFERSON CITY, Mo. | Missouri senators argued at length Tuesday over legislation triggered by AmerenUE’s efforts to build a second nuclear power plant in the state, offering dozens of changes to the bill.

The measure would let utilities pass on to customers the financing costs of new renewable-energy and reduced-emission power plants while they are being built, rather than waiting until the plants start producing energy.

Sponsoring Sen. Delbert Scott, R-Lowry City, said the changes ultimately would save money for consumers. He said Missouri must adjust how it produces electricity, particularly in anticipation of federal legislation to cap carbon dioxide emissions.

But critics argued that it’s unfair to force electric customers to pay for plants that aren’t producing and might not ever be built.

Senators prepared for a protracted debate as the measure received its first airing in either legislative chamber, then began discussing whom to exempt from any electric rate increases caused by the legislation.

First, senior citizens and the disabled who earn $40,000 or less were spared. Then, senators tried unsuccessfully to exempt automobile manufacturing plants and New Madrid-based smelter Noranda Aluminum Inc., which last week contributed nearly $80,000 to a political action committee opposing the legislation.

Senate Minority Leader Victor Callahan failed in his proposal to exempt every Missouri resident.

“As many people as we can get out of the bill, the better,” said Callahan, D-Independence.

The Senate also voted 22-9 against an amendment that would have required voter approval before the changes could take effect.

The Senate legislation would repeal a 1976 voter-approved law that bars utilities from charging customers for a new power plant until the facility is online and producing electricity. The debate over that law was triggered by an application filed by St. Louis-based AmerenUE with the Nuclear Regulatory Commission to build a second reactor at its Callaway plant about 25 miles northeast of the state Capitol.

AmerenUE has not decided whether to build the second reactor, but company officials have said they doubt the company can amass sufficient private capital without repealing the 1976 law.

Under the bill, utilities would be allowed to seek approval from state regulators to charge electric customers for the financing costs of building new power plants.

Here is how that would work:

— A utility would file an application with the Public Service Commission to charge electric customers for pre-construction costs. State regulators would then have one year to determine if those costs were prudently incurred.

— The company then would need to get the required licenses and permits for the proposed power plant.

— After that, the utility could ask regulators to issue an order allowing electric customers to be charged for the capital costs of building the new power plant. The Public Service Commission would have 11 months to rule on those requests.

— The company could then seek additional rate increases quarterly, unless state regulators specifically outline a different time frame.

The legislation also lets utilities collect costs from customers if they decide to abandon a project. But if a company sells a license to operate the power plant, then customers would need to be reimbursed first.

State utility regulators also would need to give lawmakers and the governor’s office a report by August 28, 2010, about the benefits and problems with using several different methods to pay for new power plants.

The debate over how to pay for new power plant construction had been considered one of the top issues for this legislative session. But until Tuesday’s Senate debate, the discussion mainly had been waged by activists and via advertisements.

Many of the provisions were written by freshman Sen. Kurt Schaefer, R-Columbia, who said the legislation is vital to develop alternative energy sources in the state. He said lawmakers must consider what needs to be done to create the infrastructure that will be used for producing electricity 20 and 30 years from now.

“What are we willing to accept, what are we willing to change?” Schaefer said in a rhetorical question posed to fellow senators.

But several senators remain unconvinced. Sen. Rob Mayer, R-Dexter, filed more than a dozen amendments, and Sen. Jason Crowell, R-Cape Girardeau, said only those who don’t face any rate increases support the bill.