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Senate committee to consider nuclear power bill Thursday

Rod Boshart, CR Gazette –

DES MOINES – The leader of a Senate committee considering the state regulatory framework for MidAmerican Energy’s proposed construction of a nuclear power plant said Tuesday he is hopeful changes designed to address ratepayer concerns will enable the bill to win approval needed to keep the issue alive for legislative consideration yet this session.

“I think we’re getting closer to moving it out of committee,” said Sen. Matt McCoy, D-Des Moines, chairman of the Senate Commerce Committee. “I have no idea what’s going to happen to it on the floor. But I think there’s enough votes to get it out of committee and we’re going to try to move it on Thursday of this week.”

McCoy said he was working on language designed to ensure that ratepayers won’t be charged until the project’s been approved and the financing has been put together so there won’t be pre-payment of construction costs. Under his proposed changes to House File 561, McCoy said, there would be assurances that MidAmerican would go ahead with the project – estimated to cost between $1 billion and $2 billion – once the Iowa Utilities Board determined the company’s “next generation” modular nuclear power plant was feasible.

“I think it will make it a much more consumer friendly bill,” he said.

However, Sen. Rob Hogg, D-Cedar Rapids, said he has seen a draft of the proposed changes and he sees little that would allay previous concerns about the rate-making principles the IUB would use in moving the project forward.

“If somebody is suggesting that this is a consumer protection amendment, that’s a joke,” he said.

“The problem with this bill is they can recover costs before the plant generates electricity. Customers should be paying for the electricity that’s generating, not for licensing, permitting and construction and some long-range plan. This does nothing to change that. It leaves all of the risk of cancellation on the customer,” Hogg added. “If 77 percent of Iowans were against the bill as it was previously, now maybe you’ve got 76.9 percent against it now. They have not moved far at all.”

Last session a plan to allow MidAmerican Energy to recover “all prudent preconstruction and construction costs incurred” in developing what the utility calls a “next generation” modular nuclear power plant, regardless of whether it is ever built, was approved with bipartisan support in the House.

In a newspaper “open letter” advertisement published on Tuesday, Bill Fehrman, MidAmerican Energy president and CEO, said nuclear power is necessary if Iowa is to meet its growing base-load energy needs. He said the proposed Iowa bill has the “strongest consumer protections of any enacted energy legislation” and would provide ample consumer safeguards, including annual contested rate hearings.

“I need to make it very clear that we are not asking for any sort of prepayment from customers before we receive project approval,” Fehrman said in his open letter. “MidAmerican Energy will invest the entire amount needed to build the plant over an eight- to 10-year period. Customers will be charged for the financing costs as MidAmerican’s investment in the plant over its projected life of 40 to 60 years.”

He added that his company will only recommend a nuclear project to the Iowa Utilities Board if it is in the best interest of customers as a long-term, cost-effective source of energy.

Sen. Bill Anderson, R-Sioux City, the ranking Republican on the Senate Commerce Committee, said prior to this week’s proposed changes, there were only three majority Democrats and three minority Republicans on the 15-member committee that favored passage of H.F. 561.

Anderson said he supports a diverse energy portfolio, but he had concerns about consumer protections as the bill came over from the House.

“I have concerns for the ratepayers what that monthly charge is going to be,” he said. “I think we do have an obligation to look after the consumers.”

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