On April 23 -the day after Earth Day- AmerenUE, Missouri's largest utility, announced that they were abandoning their pursuit of legislation to facilitate consumer financing of Callaway 2, a proposed 1,600 MW, Areva EPR. While they have not as yet withdrawn their application pending before the Nuclear Regulatory Commission, their CEO, Thomas Voss, stated at a news conference: “AmerenUE is suspending its efforts to build a nuclear power plant in Missouri.”
It wasn't supposed to turn out like this. Ameren had greased the skids with more than US$135,000 (Euro 100,000) in political contributions in the months leading up to the 2008 elections, and heavily lobbied the Republican-dominated legislature prior to the January introduction of their Construction Work in Progress (CWIP) bills (SB 228 & HB 554). CWIP—which requires consumers to underwrite new construction by paying carrying costs on plants being built—has been prohibited in Missouri since 1976. Voters that year outlawed CWIP in an initiative election by a nearly two-to-one margin. This was one of several factors that gave the legislature pause when asked to reverse the CWIP ban.
Ameren's bills contained more than a repeal of the No-CWIP statute. Described by one consumer advocate as “CWIP on steroids,” the bills represented a veritable utility wish-list, including the prohibition of judicial review, the locking in of utility expenditures through rushed prudence reviews, and the requirement that ratepayers pay 100 percent of funds expended in the event of a plant cancellation.
Ameren had applied to the NRC for a COL (Combined License, to Construct and Operate) for Callaway 2 in July of 2008. While they claimed they’d not yet made a firm decision to build the new reactor, by the beginning of 2009 they had already spent more than U$60 million (Euro 45 million) on the project, including ordering components and preparing their license application. They also geared up an ambitious PR effort, advertising Callaway 2 as the answer to Missouri’s economic woes, and billing it as “the largest construction project in Missouri’s history.” Ameren promised thousands of good jobs and enlisted the support of the building trades unions for whom the new nuke represented the prospect of lots of jobs on one site.
Influential politicians in both parties also came out in favor of a Callaway 2. So, by the beginning of the session, many observers expected the CWIP bills to sail through both chambers. What they didn’t foresee was opposition coming from more than just the usual suspects.
The Opposition Organizes
Anti-nuclear and environmental groups, including Missouri Coalition for the Environment, Missouri Sierra Club, Missouri Votes Conservation and Missourians for Safe Energy came together as early as August 2008 to form a coalition with any other groups interested in opposing CWIP. Immediately jumping on board were consumer groups like AARP, the Consumers Council of Missouri and the Missouri Association for Social Welfare. Also lending significant support to the effort was the Office of Public Counsel, the state agency charged with representing consumer interests. Out of this initial coalition building came a loose-knit alliance, Missourians for Fair Electric Rates (MoFER), a website, www.nocwip.org and an activist listserv to exchange information.
Another key component of the anti-CWIP alliance was Ameren’s large industrial customers, including Noranda Aluminum and Missouri Industrial Energy Consumers, an association that includes Anheuser Busch, Boeing, Monsanto, Ford, GM, ConAgra and others. While these large corporations were not eager to enter a formal alliance with the environmental community, they maintained communications and worked in tandem with Missourians for Fair Electric Rates. As the session progressed, these companies created a new entity, the Fair Electricity Rate Action Fund (FERAF) (see: www.fairenergyrates.org), and directed tens of thousands of dollars into a multimedia effort to defeat CWIP. Their resources and political clout were a levelizer, making this less a David and Goliath struggle.
MoFER organized an early February CWIP Truth Tour, bringing former NRC Commissioner and former chair of two state public utility commissions, Peter Bradford, to Missouri to speak in St. Louis, Jefferson City, Columbia and Kansas City. Bradford met with editorial boards, legislators and key policy advisors to Missouri Governor Jay Nixon. MoFER also mobilized a grassroots lobby campaign, encouraged members to make calls, write their legislators and joined in a lobby day at the Capitol in late February.
Before the Committees
When the bills came before the committees in mid-February, there were lengthy, contentious hearings in both houses, with strong opposition especially in the Senate. While the committees debated, Gov. Jay Nixon, a newly inaugurated Democrat, came out in opposition to CWIP, at least as proposed. Nixon simultaneously claimed to be for the Callaway plant, but opposed to having ratepayers begin paying for it until two conditions were met, that Ameren commit to building Callaway 2, and that the NRC authorize construction. Nixon essentially kicked the ball down the field, saying in effect that CWIP today is premature.
Ameren’s allies got their bill voted out of the House Utilities Committee by a nearly unanimous vote. But it was clear by late February that getting this passed in the Senate was not going to be a cake walk.
A mid-March legislative recess provided further opportunities for lobbying members.
And then the industrial users really turned up the heat. During the last week of March they launched a TV advertising blitz across the state. The message from these ads, and from the robo-calls that targeted districts of key legislators, was “Ameren Customers Face a 40% Rate Hike.” The drama peaked on Saturday, March 28, when Ameren went into Federal court in an attempt to quash the ads. They asked for an emergency temporary restraining order to prevent the ads from airing that day on the Elite Eight NCAA basketball playoffs, in which Missouri was competing. The court, however, rejected Ameren’s tenuous claim that the ads were confusing viewers who mistook them for Ameren’s ads.
Two days later, on March 30, FERAF announced the results of a statewide poll showing 82 percent of Missourians opposed to CWIP (62 percent strongly opposed). Meanwhile MoFER held a news conference the same day and made it clear that if the legislature overturned this voter-enacted law, opponents would petition to bring the issue back for another vote. The next day, a divided Senate Commerce Committee passed a substitute version of SB 228, including some marginal changes, but giving Ameren most everything they wanted.
Filibuster, Failure & Future
By this point, however, CWIP was the most controversial, and the most media-covered issue facing the legislature. And anti-CWIP momentum was growing. When the bill was brought before the full Senate on April 7, it faced a filibuster. Senate leaders broke off debate after midnight and called upon the parties to negotiate a compromise. Two weeks later, however, it was clear that no compromise was forthcoming and Ameren pulled the plug on the legislation.
While Ameren has announced that it is “suspending its efforts to build a nuclear power plant in Missouri,” this is not at all certain. As noted, they have not pulled their NRC application and in papers filed with the Commission on May 1 the company challenged a grassroots intervention brought against the reactor and argued that the NRC should proceed reviewing the application but should indefinitely delay financial qualifications issues raised by the interveners.
There is other evidence that Ameren is simply biding its time. Scott Bond, Ameren’s Manager for Nuclear Development, told USA Today (March 30, 2009), “Ameren wants to see if the first plants are successful. That's why the utility didn't want to be in that first wave of plants.’”
This directly contradicts Ameren’s position right up until their April 23 announcement. They’d always maintained that this legislation was needed this year to help Ameren compete for federal loan guarantees.
Clearly, Ameren has had to rethink its timeline for starting construction of Callaway 2, if for no other reason than the lack of load growth to justify adding a 1,600 MW plant. Ameren had previously maintained that they intended to complete the new EPR in the 2018-2020 timeframe, and that the plant was needed to meet their projected growth in demand.
More recently, however, they’ve indicated that their intent is to seek partnerships with other Missouri utilities. They apparently intend to use only 900 MW of the plant’s output and to sell the other 700 MW to other players. They have also indicated that their timeline has been pushed back such that construction would start no sooner than 2015 or 2016.
By mobilizing opposition to a clearly unfair rate mechanism, activists have built alliances and bought some time. While Callaway 2 is not moving forward at the moment, opponents are far from placing the final nails in its coffin.
To ensure that Callaway is actually canceled, sustainable energy advocates will need to push hard for serious commitments to energy efficiency and renewables. In the November 2008 election, Missouri adopted a renewable energy standard (RES) by a two-to-one margin. Missourians want clean energy. The utilities, however, are likely to drag their feet. An immediate task is to make sure that the RES is implemented.
Beyond this, Missouri, which is ranked 45th among the 50 states in energy efficiency, will need to take advantage of the enormous opportunities to save energy while creating jobs and economic development throughout the state. The defeat of CWIP has opened a window of opportunity. If the forces that defeated CWIP can now move Missouri to embrace a sustainable energy agenda, the nuclear revival will truly be eclipsed.
Source and contact: Mark Haim, Missourians for Safe Energy, Columbia, MO, U.S.A.
Email: [email protected]
Minnesota House upholds moratorium on new build. A move to open the U.S. state of Minnesota to future nuclear power plants fell short on April 30, in the House of Representatives. The vote was 72-60 against undoing a 15-year-old moratorium on the construction of new nuclear facilities. A 1994 statute prevents the Public Utilities Commission from authorizing construction of new nuclear facilities. The state already has two nuclear plants, near Monticello and Red Wing. The action showed divisions within the DFL (Democratic Farmer-Labor-Party) majority, with Democrats voting on both sides of the issue and most Republicans supporting the change. It came just four weeks after an April 2, surprise Senate vote (42-24) to scrap the nuclear moratorium, a position shared by Republican Gov. Tim Pawlenty.
The House vote isn't the final word on the issue. It could still come up as a House-Senate conference committee works on a final energy policy bill, although the House vote shows it will be difficult to pass a change in the policy. Minnesota aims to get a quarter of its energy from renewable sources by 2025 or even sooner.
AP, 30 April 2009 / www.clearwateraction.org