MidAmerican Energy made it clear today that if HF 561, or some form of it, does not become law, nuclear power will be “off the table” in Iowa and the electric utility will deal with it by increasing their use of natural gas to generate electricity as demand increases and coal burning power plants are taken off line. There was no equivocation on this point by Dean Crist, vice president of regulation for the electric utility.
Crist was on WHO Newsradio with Mark Cooper, senior research fellow for economic analysis at the Institute for Energy and the Environment at Vermont Law School, Silver Spring, MD. Each had different ideas about HF 561 and what it would or would not do for Iowa rate payers. It boiled down to answering this question, “does the legislation change the dynamic, or construct for approval of a potential new nuclear reactor in Iowa?” The simple answer is yes, it does, although Crist denied that during the 90 minute program segment.
In 2007, MidAmerican Energy did a study of construction of a nuclear reactor in Payette County, Idaho and decided to end the project without building because, according to Reuters, “it would cost too much.” What is the difference between Iowa and Idaho besides a few letters in the name? The Iowa bill takes the business concerns created by the market and socializes the risk. The market would not foster a nuclear reactor in Idaho, Iowa or anywhere else in the United States unless something would change. Enter Iowa and HF 561.
As Cooper pointed out during the program, MidAmerican Energy could apply to build a new nuclear reactor in Iowa now. Crist asserted that HF 561 would save rate payers money by paying some of the costs up front, thus avoiding interest. This is the same argument used in Florida when their legislature passed a similar bill. However, as was determined in Florida, if the utility decides to abandon the plans for a new reactor, there is no refund of the advance rate making moneys. In Florida’s case, rate payers are on the hook for about $1 billion dollars, with no nuclear reactor, according to Cooper. Crist said comparing Iowa and Florida is like comparing apples and oranges, but he was not convincing.
As I have previously written, Iowa needs an energy policy. Regretfully, instead of taking a holistic approach to solving Iowa’s energy needs, the legislature and the electric utilities get stuck on a single issue like HF 561 and clearing financial obstacles for investment in something the market is saying is a bad idea. All we can do in response to this approach is join in, by contacting our legislators to stop this bill. That is far short of a solution to Iowa’s energy needs, but in the days of hyperbole and half-truths, it may be the only way we can effectively intervene at this stage of the game. Here are links to look up your state legislator to advocate against HF 561.
~ Paul Deaton is a regular contributor to Blog for Iowa.