The first thing you need to know to understand Ameren’s attempt to get funding for the license application for another nuclear plant is this: in the last few years, the PSC has consistently granted rate hikes that allow Ameren to make in the 10-11 percent profit range. Yeah, yeah, I know: in this economony? to a monopoly that takes essentially no risks? But, setting aside our furious insistence that such profits are unreasonable, just know that those are the kinds of profits Ameren gets to make. SO–and this is the important part–the more money Ameren has to spend, the more profits it will make.
Couple that knowledge with the fact that, because of the disaster at Fukushima (which is now rated as bad a disaster as Chernobyl), the feds will be issuing additional safety regulations for new nuclear plants, regs that will unquestionably raise the already excessive cost of building such plants. But if building another nuclear plant thus went from, say, $3 billion to, maybe, $6 billion, that’s no skin off Ameren’s nose. Quite the opposite. It’s twice as much profit. I mean, wouldn’t you rather have ten percent of $6 billion than ten percent of a piddling $3 billion?
And if there are cost overruns that make the eventual price tag, say, $9 billion, is that more profit still? Now that’s a tricky question to answer. As things stand now, it would depend on whether the investigation after the new plant was finished–any new plant, whether nuclear or coal–whether the investigation showed that the additional costs were “prudent and reasonable.” After Callaway was finished in the eighties, the investigators disallowed $400 million. That was an expense that Union Electric had to eat.
And Ameren doesn’t ever want that to happen again. That’s why the corporation is working so hard to get $40 million out of the legislature for the license application. It’s not that Ameren can’t afford to pay for the application itself. Of course it can. The point is that if the lege gives the utility company advance funds on a plant, then the company will have effectively set a precedent that could prove the undoing of the anti-CWIP law Missourians passed in the seventies–the law that forbids giving a utility funds for a new plant until the plant is operating.
If Ameren can finagle a way around that law, then it gets ten percent of $9 billion if that’s what any new plant ends up costing. It’s not exactly an incentive to spend funds judiciously. More like … the opposite. And don’t kid yourself that we could investigate the funds that Ameren already got from us and make the company repay us for unwise expenditures. Right. If pigs fly and raindrops turn to Schlafly’s Pale Ale.
This money trail leads us to another conclusion as well, which is that Ameren doesn’t want to provide our electricity needs by helping us become more energy efficient. The company’s own internal studies show that such efficiencies would be the cheapest way to provide energy–not to mention being the kindest for the environment (and thus the kindest to our future as humans on this planet). We don’t need another nuclear plant, especially one located anywhere near the New Madrid faultline. Instead, we need to make Missouri homes and businesses more energy efficient. That would solve our energy problems for the foreseeable future.
The very fact that Ameren knows energy efficiency would solve the problem makes even considering any new nuclear plant, on its face, “imprudent and unreasonable.” The company does not deserve to have the possibility even considered. The problem is that energy efficiency is so … yecch, cheap. Instead of spending for a pricey new plant and all the lovely profits attendant upon that, Ameren would have to spend less and make lower profits than it already does. That would be so annoying to Ameren investors. In fact, the utility believes that if users instituted energy efficiency measures that lowered its profit level, it ought to be compensated for lost revenue.
The good of the public and the future of the planet be damned.
As I write this, the Senate is scheduled to take up the license renewal today or tomorrow. I made a call to my senator, Maria Chappelle-Nadal. Her legislative aide said she did not know how the senator plans to vote. Good on Maria if she votes against Ameren. Shame on her if she votes in its favor.
I couldn’t tell you for sure where the other senators stand, although I would guess that Sen. Jason Crowell (R-Cape Girardeau), who has the state’s largest electricity user, Noranda Aluminum, in his district, will probably vote in Noranda’s favor and against Ameren. The course of action ought to be clear for any informed state senator with the good of consumers in this part of Missouri at heart. But Ameren is not sitting idly by, waiting for that to happen. The company hosted a suite at the Tuesday night Lil Wayne concert and invited legislators. I’d hate to think concert tickets might determine whether we get another nuclear plant or not.