Missouri and The Callaway Plant: An Update

The last time we checked in with Missouri, AmerenUE wanted to build another unit at Callaway, but needed a change in the law to allow it to charge customers for their construction while it was ongoing. Even if this change would save kittens from being made into food, the prospect of higher energy bills remains daunting, of course, the current economic outlook sends shivers through everyone. In sum, AmerenUE couldn’t have picked a worse time to want this change.

Peter Bradford, who served on the Nuclear Regulatory Commission from 1977-1982, said the change would raise electric bills for business and residential customers and reduce the money available for creating jobs and spurring economic development.

You have to give Bradford credit for being bang up to date on his economic buzz words. If you’re trying to get a date for the prom, be sure to argue that agreeing will create jobs and spur economic development. In fact, one could argue convincingly that the Callaway plant will do both – it’s blindingly obvious that new construction is an economic good. However, asking ratepayers to pony up for it is a tough sell. AmerenUE’s giving it a try:

The Missouri Energy Development Association, a trade group for Ameren and other Missouri investor-owned utilities, estimates that electric customers' rates would increase between 1 percent and 3 percent annually and just over 10 percent during the entire project.

That figure is based on a construction project taking about six years with Ameren able to get smaller electric cooperatives and municipal utilities to buy an ownership stake in the second reactor.

In other words, they admit to a certain optimism. Keep the name Delbert Scott in mind: he’s the state legislator putting forth the bill to make the change AmerenUE is looking for.

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And here come the Greens:

Such efforts have been met with disdain by environmentalists, many of whom say categorizing nuclear power as "clean" energy is greenwashing.

"They're putting a green bow on a box of radioactive waste that's never going to go away," said Kathleen Logan Smith, executive director of St. Louis-based Missouri Coalition for the Environment.

We think Ms. Smith has seen Kiss Me Deadly, with the Great Whatsit. Nuclear waste has practically lost all its ground as an argument; maybe Ms. Smith could try job creation and spurring economic development.

Correx: we said AmerenUE wanted to build two new units. It's just one - we got over-enthusiastic.

Well, we can’t feature that darned arch every time we look in at Missouri. This is the world’s largest pecan, in Brunswick. We think they kind of missed the boat on achieving a pecan here, but world’s largest filbert probably doesn’t make much sense in Brunswick. Here’s some info.

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Wednesday Update

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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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