Groups challenge AmerenUE on Callaway 2 costs
Consumer advocates in Missouri are challenging efforts by AmerenUE to bill electric customers millions of dollars a year for costs tied to the possible construction of a second nuclear power plant.
In April, the St. Louis-based utility sought a $251 million increase in electric rates. Most of the increase is related to higher costs for fuel and equipment to generate and deliver electricity to the utility’s 1.2 million customers. But embedded in that amount is millions of dollars to help pay for AmerenUE’s license application filed with the Nuclear Regulatory Commission.
The Missouri Public Service Commission staff has urged regulators to deny Ameren’s request related to nuclear license expenses, saying it would violate a state law that prohibits utilities from recovering costs from a new power plant before it’s fully operational.
"It’s (the) staff’s position that it’s not appropriate," said Bob Schallenberg, director of utility services for the PSC staff, a team of accountants, engineers and auditors who advise the commission. If a return on AmerenUE’s nuclear application is approved, it would mean $5 million to $7 million a year in costs to customers, he said.
AmerenUE spokesman Tim Fox declined to comment, citing rebuttal testimony to be filed by AmerenUE next month. But, he said, "In general, we included in our request costs we believe will support the future reliability of our power supply given the rising demand for electricity in Missouri."
Disagreements over expenses and whether they can be passed on to customers is typical of a rate case. In fact, the PSC staff last month urged regulators to disallow most of the $251 million increases sought by AmerenUE.
However, the dispute over expenses related to Ameren’s nuclear application will be watched closely because it represents a rare test of Missouri’s Construction Work in Progress, or CWIP, law.
The law, otherwise known as Proposition 1, was approved in 1976 by Missouri voters amid a grassroots campaign to stop a second nuclear plant from being built in Callaway County online payday advance. AmerenUE, then called Union Electric Co., pulled the plug on a second nuclear plant in 1982. Today, however, the utility is reviving efforts to build another reactor.
The estimated price tag for Callaway 2 would be at least $6 billion, perhaps $9 billion including financing costs — exceeding the market value of the utility’s parent company. So AmerenUE will develop the project only if it can get the CWIP law overturned, enabling it to charge customers while the plant is being built.
While AmerenUE hasn’t committed to building the plant, it already has filed an 8,000-page construction and operating license application with the NRC in an effort to be eligible for tax breaks and federal loan guarantees under the 2005 Energy Policy Act.
As of April, AmerenUE had spent $47 million preparing the license application and planned to spend an additional $4 million before Sept. 30 — all costs it wants to include in its Missouri rate base.
Missouri Public Counsel Lewis Mills, whose staff represents consumer interests in utility matters, said he’ll join the PSC staff in challenging AmerenUE’s efforts to recover nuclear license expenses. So will John Coffman, Mills’ predecessor and now attorney for the Consumers Council of Missouri.
"The law is very clear," Coffman said. "It is worded pretty broadly to include anything that’s not associated with a facility or a resource that’s not fully operational and in service."
jtomich@post-dispatch.com | 314-340-8320
Filed under: marketing by Specialist