Missouri's Callaway County nuclear plant.

Missouri hasn’t seen a new nuclear plant in more than 30 years.

A local lawmaker and state air conservation officials say that needs to change to meet the demands of the future.

Their first step: letting power companies bill customers up front for the cost.

Rep. John Black, R-Marshfield, filed a bill earlier this month that would allow companies to add the cost of a new nuclear plant or renewable energy generator to customers’ rates while they’re under construction.

Missouri voters banned the practice via initiative petition in 1976, shortly after St. Louis-based Ameren’s corporate predecessor won approval to collect costs while it built the state’s first nuclear power plant in Callaway County.

Consumer advocates railed against the idea of paying for something not yet in service. Environmentalists raised the specter of potential disasters. At the ballot box, 63 percent of voters agreed, delivering a durable mandate that has withstood efforts to repeal the law.

Black and his supporters say it hasn’t aged well, though.

Coal, long Missouri’s chief power source, is declining nationally amid competition from cheap natural gas, and experts say the world needs to reduce the use of both to avoid the worst of climate change.

“The world has changed a lot since 1976, and frankly since 2009,” Black said. “We now are becoming more and more convinced there will likely be no new coal plants.”



Supporters say carbon-free nuclear power can and must be a part of the replacement, but contend it’ll only work if the ban is repealed.

The opposition hasn’t gone anywhere, though, and their objections to paying for things before they work have added heft in light of fiascos in the Southeast.

John Coffman, who led the state’s utility watchdog from 2003-2005 and now does advocacy work around the country, said Black’s idea is simply about shifting risk from Wall Street to utility customers.

“Sometimes Wall Street doesn’t want to invest in it unless they’re using the ratepayers’ money to do it,” Coffman said. “But then people should be asking, ‘Why is that?’”

‘I think we’ll all want it’

The argument for Black’s bill starts with a basic truth: Utility equipment costs money.

Privately owned utilities, like Ameren, Liberty Utilities in southwest Missouri and Evergy in Kansas City, generally raise money for equipment from investors, who expect their money back plus interest.

The companies generally get that money by using the equipment to create power they sell to customers, but they can’t do that while the equipment is under construction.

That complicates paying for a big project that takes years to finish — like, say, a nuclear plant.

Investors may demand higher returns, which customers will eventually have to pay, or they might not invest in nuclear power plants at all.

Ron Boyer, who lives in Fair Grove and serves on Missouri’s Air Conservation Commission, says the latter scenario has plagued Missouri since the ban.

He noted that in 2009, Ameren asked the legislature to repeal the ban so it could build a new nuclear reactor at its site near Fulton. When it became clear its favored bill wouldn’t pass, the company shelved its plans.

Boyer also blamed Ameren’s 2012 failure to win a federal grant to help build next-generation reactors on the ban.

He said those failures are why he pushed a resolution the air conservation commission unanimously approved Nov. 1 calling the ban “an intractable roadblock for financing and construction of new nuclear plants in Missouri” and asking the General Assembly to address its “negative impact.”

Ed Smith, the policy director for the Missouri Coalition for the Environment, disagreed.

He said Ameren built its Callaway reactor in the 1970 and 1980s without early cost recovery, proving it’s possible, if not ideal for shareholders.

But he said the lack of easy taxpayer or ratepayer money for nuclear has led Ameren to make better decisions for the public.

“Missouri was spared of having its customers spend billions of dollars on a nuclear plant,” he said. “And Ameren has acquired wind farms, built pipelines and done other things that are prudent for its customers rather than chasing this shiny nuclear idea that would generate a chunk of money for investors but was not in the best interest of their customers.”

It’s not clear whether Ameren or any other utility is pushing Black’s change.

Warren Wood, Ameren’s vice president of regulatory and legislative affairs, said his company was still reviewing the bill. He added in an emailed statement that nuclear energy “will continue to be a vital part of Ameren’s safe, clean and reliable generation mix now and well into the future,” but also said the company has no “current plans to develop additional nuclear capability.”

Evergy, which serves the Kansas City area, took a similar tack.

“Evergy appreciates policies that support and encourage expansion of renewables and carbon-free energy sources,” spokeswoman Gina Penzig wrote in an email. “Our current generation plans don’t include new nuclear.”

Liberty Utilities, which serves a number of southwest Missouri communities, did not respond to requests for comment this week.

Boyer is confident they’ll take advantage of the change if it happens, though.

“I think we’ll all want it,” he said. “You can’t totally operate on wind and solar.”

Boyer and Black said they support wind and solar power, just like Smith, but also want Missouri to have clean “baseload” power that can work around the clock.

Black and Boyer also rejected the idea that the bill would let utilities bilk customers for shareholders. Both pointed out the Public Service Commission, which regulates investor-owned utilities, would still vet proposals and protect consumers’ interests.

“If they’re doing their job right, the PSC is going to protect ratepayers,” Boyer said.

‘The public should not be their insurance’

John Coffman, the ratepayer advocate, is unconvinced.

Coffman, who now represents the Consumers Council of Missouri, said all Black’s bill does is shift the risk taken on by investors and shareholders to customers.

That may not be a problem if a project is completed on time and on budget, but Coffman said other recent projects suggest there’s no guarantee and plenty of downside.

He represented AARP of South Carolina in the aftermath of that state passing a law allowing cost recovery during construction, which led to utility companies spending $9 billion on a reactor and then abandoning it amid cost overruns, delays, falling energy demand and the bankruptcy of its lead contractor.

Ratepayers have already paid more than $2 billion for the project, according to the (Charleston) Post and Courier, and are on the hook to pay a new owner roughly the same amount over 20 years.

“The public should not be their insurance,” Coffman said.

South Carolina has a public service commission, too. But Coffman pointed out the companies behind the failed project were able to withhold information from it to get what they wanted. In one case, according to The State, a company withheld information showing cost overruns were inevitable before asking the commission for a rate hike.

Coffman said it may not have even mattered once the project broke ground.

“Once you’ve already charged ratepayers for something, sometimes there’s this sense that you’ve already committed yourself,” he said. “Pre-approval is generally not the consumer’s friend.”

Missouri’s Office of Public Counsel, the state utility watchdog Coffman used to direct, agrees.

The office’s chief economist, Geoff Marke, cited the same problems in South Carolina in a letter to the Missouri Air Conservation Commission opposing its resolution in October.

“Today, nothing is preventing an electric utility from pursuing nuclear,” he said. “To date, utilities have not pursued nuclear for two primary reasons. 1.) They have no need to add incremental baseload generation; and 2.) The instability of the nuclear industry.”

A new hope?

To those kinds of concerns, nuclear advocates often have three words: small modular reactors.

The SMRs, as they call them, are still in development with help from the federal government.

Black, Boyer and other nuclear proponents are nevertheless encouraged by their promise.

If they work as advertised in technology and science publications, they’ll be smaller, safer, cheaper and easier to build than what’s running right now.

“With the modern nuclear fleet that’s going to be coming online sometime in the near future,” Black said, “I don’t believe that the issues you saw in the Southeast are going to be the same magnitude.”

Black’s not alone in his optimism. The small reactor concept has garnered formal interest from utilities in Utah and the federal government’s Tennessee Valley Authority.

Boyer acknowledged the small reactors might not be ready for several more years, but he said Missouri shouldn’t wait to prepare itself.

“We may not have a new reactor in 5 years. We may not have one in 10 years,” he said. “But at least we’ve opened up the marketplace for when we need it.”

Smith said that was a poor excuse for repealing a voter-approved consumer protection law.

“There’s no proof SMRs are going to happen,” he said. “Let’s cross that bridge when we come to it.”

The legislation is House Bill 1784.


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