Show Me the Nuclear Plant

AmerenUE plans to build a second unit at its Callaway plant in, appropriately enough, Callaway county, Missouri. So far, the reaction is pretty good:

AmerenUE says the plant would provide 2,500 new jobs with an annual payroll of $400 million for about five years during construction. The second reactor also would create at least 400 well-paying permanent Callaway County jobs with an annual payroll of $30 million. Callaway County residents also are elated that the project would produce an estimated $115 million annually in property taxes during construction and another $90 million each year after the plant begins operating.

This is a news story, which leads us to wonder how writer Don Norfleet knows how “elated” the residents are – maybe he really has the pulse of his neighbors, be we suspect editorializing. The numbers are reasonable, though, and good for the county.

However, AmerenUE has had to militate for a change in the law to bring about the new unit:

At issue is legislation introduced a few days ago that would repeal a 1976 law approved by a ballot initiative that prevents utilities from charging customers for power plants until after they are constructed.

AmerenUE officials say they won't be able to build the plant if the law is not repealed and customers would be hit even harder with higher rate hikes if payments did not start until after construction was completed. Attracting financing with no immediate income stream in the current economy also would be questionable.

The reason for laws like this is to keep costs from running wild, but state commissions can presumably serve the same purpose. Where there is opposition to the new unit, it comes not from environmentalists, but from consumer activists – and that’s not due to the plant, or a problem with nuclear energy, but because they don’t want customers to be charged while the plant is being built.

But we wonder, nuclear or not, whether this is just a sign of the world that’s coming: as renewable energy sources ramp up and cap-and-trade legislation encourages non-renewable sources to ramp down, the result will certainly be some rugged bills coming through the mail – or energy credits to consumers – or state and federal subsidies. A mix of several of these, but an issue Missouri will likely be among the first to face. Let’s see how this does in the legislature and then follow it from there.

It’s called the Jefferson National Expansion Monument – inviting name, no? This is probably a state courthouse – the capital is in Jefferson City, not St. Louis.

Fluor Invests in NuScale

You know, it’s kind of sad that no one is willing to invest in nuclear energy anymore. Wait, what? NuScale Power celebrated the news of its company-saving $30 million investment from Fluor Corp. Thursday morning with a press conference in Washington, D.C. Fluor is a design, engineering and construction company involved with some 20 plants in the 70s and 80s, but it has not held interest in a nuclear energy company until now. Fluor, which has deep roots in the nuclear industry, is betting big on small-scale nuclear energy with its NuScale investment. "It's become a serious contender in the last decade or so," John Hopkins, [Fluor’s group president in charge of new ventures], said. And that brings us to NuScale, which had run into some dark days – maybe not as dark as, say, Solyndra, but dire enough : Earlier this year, the Securities Exchange Commission filed an action against NuScale's lead investor, The Michael Kenwood Group. The firm "misap...

Wednesday Update

From NEI’s Japan micro-site: NRC, Industry Concur on Many Post-Fukushima Actions Industry/Regulatory/Political Issues • There is a “great deal of alignment” between the U.S. Nuclear Regulatory Commission and the industry on initial steps to take at America’s nuclear energy facilities in response to the nuclear accident in Japan, Charles Pardee, the chief operating officer of Exelon Generation Co., said at an agency briefing today. The briefing gave stakeholders an opportunity to discuss staff recommendations for near-term actions the agency may take at U.S. facilities. PowerPoint slides from the meeting are on the NRC website. • The International Atomic Energy Agency board has approved a plan that calls for inspectors to evaluate reactor safety at nuclear energy facilities every three years. Governments may opt out of having their country’s facilities inspected. Also approved were plans to maintain a rapid response team of experts ready to assist facility operators recoverin...

Nuclear Utility Moves Up in Credit Ratings, Bank is "Comfortable with Nuclear Strategy"

Some positive signs that nuclear utilities can continue to receive positive ratings even while they finance new nuclear plants for the first time in decades: Wells Fargo upgrades SCANA to Outperform from Market Perform Wells analyst says, "YTD, SCG shares have underperformed the Regulated Electrics (total return +2% vs. +9%). Shares trade at 11.3X our 10E EPS, a modest discount to the peer group median of 11.8X. We view the valuation as attractive given a comparatively constructive regulatory environment and potential for above-average long-term EPS growth prospects ... Comfortable with Nuclear Strategy. SCG plans to participate in the development of two regulated nuclear units at a cost of $6.3B, raising legitimate concerns regarding financing and construction. We have carefully considered the risks and are comfortable with SCG’s strategy based on a highly constructive political & regulatory environment, manageable financing needs stretched out over 10 years, strong partners...

NEI Nuclear Notes

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