Iowa bill would help MidAmerican Energy pay for possible nuclear power plant, but critics say state already produces surplus energy and doesn't need expensive electricity generator
DES MOINES, Iowa
February 13, 2012
– Some lawmakers and advocacy groups are questioning a measure that would help MidAmerican Energy pay for a possible nuclear power plant, arguing that slow-growing Iowa produces significantly more energy than it uses and doesn't need an expensive electricity generator.
Opponents of the measure, which would let the utility recover costs related to a nuclear plant regardless of whether it's completed, point to data from the U.S. Energy Information Administration showing that Iowa's electrical supply has grown more than twice as fast as consumption since 2000, turning Iowa into a net exporter of electricity.
Supply has climbed by nearly 39 percent over the past decade while consumption has grown by 18 percent. In 2010, Iowa electricity producers sold on the open market a net of 14 percent of the energy they produced.
Data from 2008 show that MidAmerican, which accounts for 43 percent of production in the state, sold 38 percent of its energy on the open market.
MidAmerican spokeswoman Tina Potthoff said that in 2010 about 30 percent of the company's generation was sold. It's unclear how much went out of state and how much was bought and used within Iowa.
Such statistics have convinced Sen. Rob Hogg, D-Cedar Rapids, that the nuclear measure isn't needed. Although it makes sense for Iowa utilities to export excess wind energy, which is hard to rely on day-to-day, Hogg said he can't see billing customers for a nuclear plant that would enable MidAmerican to export more power to other states.
A plant would likely cost $1 billion or more.
"If the idea is to have our ratepayers upfront the cost for a nuclear power plant that would then be used primarily for export, that's just totally ridiculous," Hogg said.
AARP has been a leader in questioning the nuclear plant bill, and Anthony Carroll, a lobbyist for the organization, said the amount of power exported from Iowa at least shows the need to study the matter further before approving the measure now before lawmakers.
"This confirms that we should do a baseload study of what our needs are, especially before locking consumers into a bad deal," Carroll said.
Iowa now has one nuclear plant, the Duane Arnold Energy Center near Cedar Rapids, which produces about 9 percent of the state's electricity. NextEra Energy Resources is the plant's majority owner and operator.
Supporters of the measure now before lawmakers argue that Iowa eventually will demand more electricity and that the measure before lawmakers would help, because it would let MidAmerican raise money in advance, limiting more expensive borrowing of money.
Potthoff said the excess supply in Iowa also probably won't continue for long, because expected environmental regulations could limit coal-powered electrical plants at a time when an improving economy will increase demand. Although wind power is important, it's less consistent than coal or nuclear, she said.
Even if the Legislature approves the measure, MidAmerican would still have to seek approval from the Iowa Utilities Board before it could move ahead with a plant. The federal Nuclear Regulatory Commission would also have to approve any new nuclear power plant.
The main supporter of the bill before the Legislature, Sen. Matt McCoy, D-Des Moines, said MidAmerican's ability to export power has subsidized its Iowa customers' electrical rates, enabling them to remain fairly steady for 16 years.
"If we become a center for nuclear energy and we meet our needs and also remain a net exporter of energy, that's good for our manufacturing base, good for our low-income families and good for our elderly on fixed incomes," said McCoy, chairman of the Senate Commerce Committee.
MidAmerican is owned by Warren Buffett's Omaha-based Berkshire Hathaway Inc. conglomerate. Berkshire also owns The World-Herald.
Alliant Energy, which owns the state's other investor-owned electrical utility, Interstate Power and Light, is neutral on the bill.
Spokesman Ryan Stensland said the utility isn't interested in pursuing a nuclear plant as it prepares for pending regulations and future demands. The company is instead considering closing older plants, building a new natural gas facility and purchasing power on the market, he said.
It was unclear whether the nuclear bill will be approved. The measure has stalled in the Senate after being approved by a subcommittee last month, and McCoy said he's trying to attract votes to move it out of the Senate Commerce Committee.
The House approved a similar measure last year, but the Senate never debated it.
Sen. Bill Anderson, the top Republican on the Commerce Committee, said he supports expanding the state's energy portfolio, including producing more nuclear power. But Anderson, of Pierson, said he's not comfortable with the measure.
"Ultimately it goes back to the cost to ratepayers," he said.
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