Wednesday, April 27, 2011

“This is a huge step for Iowa”

corn "This is a huge step for Iowa, and it is a huge step if we believe we want to grow the great state of Iowa," said Rep. Chuck Soderberg, R-Le Mars, chairman of the House's commerce committee and floor manager of the bill. "If Iowans, if businesses are expected to stay here, we need to provide them with power."

A huge step? Well, it just may be:

The Iowa House gave the go-ahead Tuesday to legislation that helps pave the way for a new nuclear power plant in Iowa

It’s MidAmerican that wants to build a new nuclear plant – this legislation doesn’t mandate that occurring, it just allows MidAmerican to charge ratepayers a modest monthly fee to help pay for the construction.

That may sound obnoxious. In fact, the story in the Sioux City Journal leaves objectivity to say so:

Whether MidAmerican Energy will decide to build a plant is not a done deal, but its ratepayers would be on the hook to help cover the cost of nearly all facets of the pre-planning and construction of a new nuclear facility, even if the plant is never built.

Clearly news to writer Mike Wiser, but ratepayers are always on the hook for new energy build, nuclear, coal or whatever – it’s just a question of how much is on that hook – the way MidAmerican wants to do it, far less.

Construction Work in Progress (or CWIP) is used by many energy providers to build new plants. It’s more beneficial than it sounds because it allows MidAmerican (in this case) to finance the plant without running up gigantic interest charges – which would be paid by the ratepayers ultimately. That really would be obnoxious.

I suppose the hugeness of this news will manifest itself when MidAmerican announces that it will build a new plant. So we’ll wait for that. (Iowa already has a nuclear plant, by the way – Duane Arnold Energy Center – that is owned by NextEra, The Central Iowa Power Cooperative and the Corn Belt Power Cooperative.)

---

Bloomberg has been on the nuclear beat lately:

U.S. nuclear-power output increased from 4½-year lows as Energy Future Holdings Corp. started the Comanche Peak 2 reactor in Texas, the Nuclear Regulatory Commission said.

Power generation nationwide increased 857 megawatts from yesterday to 72,898 megawatts, or 72 percent of capacity, according to an NRC report today and data compiled by Bloomberg. Twenty-six of the nation’s 104 reactors were offline.

Looking at it this way can be a little silly, as it implies that nuclear energy plants have been sputtering along, barely able to light a bulb. But refueling outages will always cause slight rises and falls on an annual basis. Nothing new or unusual here. Maybe the industry should just time things to ensure one year has no outages anywhere so as to get a happier lead (though the lead the following year will be awful.)

The story explains this at the very bottom:

Some reactors close for maintenance and refueling during the spring and fall in the U.S., when demand for heating and cooling is lower. The outages can increase consumption of natural gas and coal to generate electricity.

Or wind or solar or hydro, if they’re in the vicinity.

On the other hand, putting together a story like this is fairly thankless. I guess Bloomberg wanted to present this information and the story is actually pretty tight, if not really with much apparent purpose: noting which plants increased or decreased their loads. For example:

Exelon Corp. increased output from the 1,164-megawatt Byron 1 reactor in Illinois to 65 percent of capacity from 40 percent yesterday after a refueling outage. Another unit at the site, the 1,136-megawatt Byron 2, is operating at full power. The plant is located 85 miles west of Chicago.

And so on. That’s the story: some plants increased capacity, some plants decreased. If you want to know which did which, here it is.

Well, all right, it’s pretty, um, corny. But if you look through any post card rack in Iowa, you’ll find a variation of it.

4 comments:

Anonymous said...

I've never understood this "reactors close" or "nuclear plant closed" phrase. What, are the doors locked up and the lights turned out? Is nobody working there? The wording "closed" conjures an image of a shutdown factory, an abandoned shopping mall, a deserted building. In fact, during an outage, nuclear plants are very, very busy places, refueling and maintenance and trying to get back online as quickly as possible to start making the megawatts again.

Brian Mays said...

Good point, Anonymous. It's the home offices of the service companies that look like ghost towns during outage season, because almost everyone is deployed to the sites.

Anonymous said...

How is this not socialism? Expropriating wealth from the public through, what is essentially, a tax for a massive public works project. Oh that’s right, they don’t plan on sharing the profit, just the expense.

Brian Mays said...

No, it's not socialism. Under socialism, the government would own the plant, either directly or indirectly.

This is highly regulated capitalism. Need I remind you that in a totally free-market capitalistic system, the market would determine the rates that the customers pay. Thus, the company building the plant would charge whatever the market could bear and wouldn't need to go ask the government whether it can increase its rates.

Since the government has taken upon itself to determine what the rates will be, it is up to the government and its regulators to make wise decisions that provide the most benefit to all stakeholders. In this case, it's like choosing to start paying off your mortgage for a new house while it's still under construction. The sooner you pay off the mortgage, the less interest you will pay.

The ratepayers will end up paying less in the long run.