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Consumer advocates and other activists squared off against electric utility executives and labor leaders today as an Iowa Senate subcommittee considered a bill that could pave the way for construction of a new nuclear power plant by MidAmerican Energy.
Power plant opponents warned the bill, Senate File 390, would force Iowa electric customers to pay for a risky plan that Wall Street financiers aren’t willing to put their money on.
“MidAmerican is privatizing the profits, and socializing the costs,” said Wally Taylor of Cedar Rapids, a lawyer for the Iowa Chapter of the Sierra Club.
Nuclear plant supporters said the new generating facility would offer a safe, reliable form of so-called “baseload” energy that would always be available. They added that costs for building coal-fired electrical generating plants will also inevitably rise in the future as Iowa’s demand for electricity increases.
“We think it is important that we have options going forward,” said Greg Fritz, chief executive officer of the Humboldt-based North Iowa Municipal Cooperative Association, which would consider a partnership with MidAmerican Energy in building the plant.
No decisions were made today. The regulatory bill has already been approved by the Iowa Senate Commerce Committee, clearing its way for consideration on the Senate floor. But lawmakers had promised further discussion of the bill before it is considered for approval by the full chamber, which led to a packed Iowa Capitol hearing room today as supporters and opponents debated its merits.
The bill would allow MidAmerican and its partners to recover “all prudent costs” associated with obtaining permits and licenses and to construct the proposed 540 megawatt plant that would be located at an unspecified Iowa site. MidAmerican expects its share of the project’s costs would be $1 billion to $2 billion, and partners would also contribute money towards constructing the plant.
MidAmerican Energy officials have said customers would see their electric bills rise 10 percent over a decade to pay for the investor-owned utility’s share of the proposed plant. That doesn’t include any other rate increases the company might seek to cover costs not related to construction of the plant.
Anthony Carroll, associate state director of the Iowa AARP, said he opposes the bill because of cost concerns, not because of safety issues. Many Iowans, including older people, business people and farmers have serious concerns about higher bills for electricity, and he warned that the nuclear energy industry is notorious for plant construction cost overruns.
Sen. Pat Ward, R-West Des Moines, a subcommittee member, defended the proposal. She said it’s true that paying for MidAmerican Energy’s plan would raise customers’ costs, but she noted studies have shown nuclear electricity is one of the least expensive power options based on cost per kilowatt hour. “I think that is something to keep in mind if this plant goes forward,” she said.
William Fehrman, MidAmerican’s president, said the company “certainly respects and appreciates those concerns” about increased customer costs. But he added, “Costs are going to go up. That is just a fact of life.” Consumers and legislators should also be aware that coal-fired power plants will be negatively affected in the future by “very strong and onerous regulations” coming forward because of environmental issue, he added.
Sonia Ashe, an advocate for the Iowa Public Interest Research Group, said the biggest question is whether a nuclear plant represents the best investment for Iowa’s future. Private capital markets have readily bet their money on wind energy, but haven’t wanted to touch nuclear power plants “with a 10-foot pole,” she said. Iowans shouldn’t be forced to pay higher electrical bills for a plant they don’t even know will be built, she added.
Sen. Ward said MidAmerican Energy is a tremendous believer in wind energy, but nuclear power that would be generated by the company would provide a base-load form of energy that would be available “24 hours a day whenever you flip the switch.” In contrast, “wind energy is only available when the wind blows,” she said.
Skip Laitner, an economist who spoke for the Iowa Beyond Nuclear Coalition, which opposes the bill, called for increases in energy efficiency. But Fehrman said that MidAmerican Energy already spends millions of dollars annually on energy efficiency programs. “Can we go further? Absolutely,” he added. But with each higher level of energy efficiency, the costs increase. One of the most fundamental issues of dealing with energy efficiency is addressing human behavior, he said, noting that MidAmerican has had stable rates since 1995.
Earl Agan, president of the Central Iowa Building and Construction Trades Council, said the proposed plant would provide a huge boost to Iowa’s construction industry, noting that 12,500 Iowa construction workers have lost their jobs in the past three years. “For all of you on a fixed income, try no income,” he said.
“I am just asking you to let Iowa construction workers build this nuclear power plant and build Iowa’s future,” Agan said. A mid-range for average pay for such workers would be $35 to $40 per hour, he added.
Sierra Club attorney Taylor said his primary concern is that the bill is not fair to rate payers and usurps the authority of the Iowa Utilities Board. He said typical rate-paying is supported with facts, data and testimony and a lengthy process is conducted before the board makes a decision.
“This bill undercuts that process,” Taylor said. “This is special interest legislation for one company…”
Taylor argued that just like wind energy being intermittent, so are coal-fire plants, which are periodically shut down for repairs and maintenance. “Don”t fall for the baseload argument,” he added. The proposed plant is a risky proposition, otherwise special legislation would not be needed, he said.
Jim Krieg, general manager of Cedar Falls Utilities, warned that “there is not a silver bullet that is going to address our energy needs going forward.” Costs for both coal and nuclear electrical plants will increase in the future, but lawmakers should keep the nuclear option available, he said.
Darrell Wenzel, general manager of Independence Light and Power and president of the Iowa Association of Muncipal Utilities, said MidAmerican’s plan offers the best proposal for construction of new baseload electrical generation. He warned that if demand for electricity rises and there isn’t sufficient supply, “then the price will skyrocket.” It is better to pay a little more for electricity now than a lot more later, he added.
Sen. Swati Dandekar, chair of the Iowa Senate Commerce Committee, said after the meeting that no date has been set for the nuclear plant bill to be debated on the Senate floor.
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