After more than five hours of debate, the Iowa House on April 26 approved a bill to let MidAmerican Energy charge consumers for costs associated with a nuclear reactor it may or may not build in the coming decade. House File 561 passed 68 to 30. All Republicans present except two voted yes, joined by 12 House Democrats: Deborah Berry (district 22), Chris Hall (district 2), Minority Leader Kevin McCarthy (district 67), Dan Muhlbauer (district 51), Pat Murphy (district 28), Rick Olson (district 68), Brian Quirk (district 15), Mark Smith (district 43), Phyllis Thede (district 81), Andrew Wenthe (district 18), John Wittneben (district 7) and Mary Wolfe (district 26). The remaining 29 House Democrats voted against the bill. Two Republicans voted no: Guy Vander Linden (district 75) and Kim Pearson (district 42).
Details on the House debate and efforts to amend the bill are after the jump, along with some speculation about its prospects in the Senate and thoughts about the coalitions lobbying for and against it.
An unusually large number of amendments were submitted to House File 561. Many came from Democrats seeking more protection for consumers, more obligations for MidAmerican, or further study of the risks, costs and benefits of nuclear power. Most of the Democratic amendments failed by voice vote or nearly along party lines if roll call was taken. The House Journal for April 26 lists the amendments in the order considered and includes the roll calls. Most of the Democrats who voted for final passage of House File 561 supported amendments to improve this very bad bill during the floor debate.
Notable amendments that passed Tuesday:
*language to require an applicant to build a nuclear power plant to work with relevant state agencies to develop a detailed “public emergency preparedness and response strategy in the event of an accident, natural disaster,” or other event threatening public safety and welfare. Passed unanimously, submitted by Democrat Chuck Isenhart (district 27), amended by Republican Chuck Soderberg (district 3).
*language instructing the governor to appoint a task force to “evaluate the economic development opportunities created through nuclear electric power generation in this state and to develop specific plans to maximize these opportunities.” Passed unanimously, jointly submitted by Soderberg and Democrat Pat Murphy.
*language allowing the Iowa Utilities Board and the state’s Consumer Advocate to hire new employees to handle matters related to ratemaking principles to finance a nuclear power project. Passed unanimously, submitted by Soderberg.
Notable amendments that failed on voice votes:
*an attempt to replace the entire bill with language creating an interim study committee with five House representatives and five state senators, who would study issues relating to nuclear power generation and report back to the legislature by January 15, 2012. Submitted by Chuck Isenhart (district 27).
*language requiring a utility to project trends related to energy demand, production and transmission over a 20-year period before applying to build a nuclear generating facility. Submitted by Vicki Lensing (district 78).
*language requiring the Iowa Utilities Board to submit a report on “baseload electrical generation options and costs” by January 1, 2012. The study would explore “nuclear power and potential retrofits of existing generation plants, based on evidence regarding system benefits, rate impact, financing options, and any risks of delay, cancellation, or cost overruns.” Submitted by Nate Willems (district 29).
*language requiring a utility to conform to an “energy savings performance standard of 1.5 percent annual reduction in energy use” if that utility seeks to operate a nuclear generating facility in Iowa. Submitted by Isenhart.
*language removing a section of the bill that would protect a utility from having to refund money if a court decision modified rules on what the utility could charge customers to cover anticipated costs of building a nuclear plant. Submitted by Bruce Hunter (district 62).
*language stating that a utility could recover costs from ratepayers only “over the useful life of the nuclear unit,” not “during the period of construction.” Submitted by Isenhart.
*an attempt to remove part of one sentence asserting that nuclear generation has a proven record of providing a “safe, reliable and secure” electricity production. Submitted by Mary Mascher (district 77).
*language requiring a utility that seeks to build a nuclear facility to “demonstrate that the need for additional baseload generating capacity justifying the application cannot be achieved in whole or in part through any combination of demand reduction strategies, or any combination of demand reduction strategies and alternative generating options.” Submitted by Isenhart.
Notable amendments that failed on nearly party-line roll call votes:
*language requiring a public referendum in any county where a company seeks to build a nuclear generating facility. If a majority of county voters reject the proposal, the application to build the nuclear plant would be denied and another referendum could not be held in that county for at least eight years. All Republicans voted against this amendment (so much for “local control”!), joined by Democrat Brian Quirk; the rest of the Democratic caucus voted for it. Submitted by Dan Kelley (district 41), Phyllis Thede (district 81), Beth Wessel-Kroeschell (district 45) and Ruth Ann Gaines (district 65).
*language stating that in the event of an accident or natural disaster, the utility operating a nuclear generating facility bears “sole responsibility for the costs associated with the cleanup and disposal of any radioactive material and for resulting damages sustained by individuals and entities.” The amendment also said neither ratepayers nor taxpayers would be charged for those costs. Obviously MidAmerican would never build a nuclear reactor if it had to assume those risks. All Republicans voted against this amendment, joined by Democrat Brian Quirk; the rest of the Democratic caucus voted for it. Submitted by Wessel-Kroeschell.
*an attempt to replace most of the bill text with language instructing the Iowa Utilities Board to analyze “risks associated with financing nuclear power plants and the assignment of those risks, and safety risks associated with traditional nuclear facility and small modular reactor technology construction.” The board would report back to the legislature with recommendations by January 9, 2012. All Republicans voted against this amendment, joined by Democrats Brian Quirk and John Wittneben; the rest of the Democratic caucus voted for it. Submitted by Janet Petersen (district 64).
*language to cap rate increases a utility could impose to recover costs associated with building a nuclear power plant. The revenue increase would be applied equally to each customer class and capped at one percent per year. Most of the Republican caucus and Democrats Brian Quirk and John Wittneben voted against this amendment; the rest of the House Democrats voted for it, joined by Republicans Kim Pearson (district 42) and Guy Vander Linden (district 75). Submitted by Anesa Kajtazovic (district 21). Kajtazovic commented during the debate, “I know there are people back home that support nuclear energy as part of a comprehensive plan. But they don’t support an open checkbook.”
Prospects in the Iowa Senate
Governor Terry Branstad supports more nuclear power generation, so the only way to stop this legislation is to keep it from passing the Iowa Senate. The companion bill Senate File 390 passed the Senate Commerce Committee on a bipartisan vote in March. Senate Majority Leader Mike Gronstal told IowaPolitics.com this week that a decision on bringing the bill up for a floor vote “hasn’t been made.” Last month nine Democratic senators urged their colleagues to shelve the nuclear bill. They want a legislative commission “to thoroughly investigate all of the issues including the need for a nuclear power plant, the costs and impact on utility rates, financing and liability issues, safety and waste disposal issues, and renewable energy alternatives.”
The American Association for Retired Persons has spoken out repeatedly against this bill, saying it would hurt consumers on fixed incomes. After House passage on Tuesday, an AARP statement said:
“AARP is concerned about this legislation, not because of the question of nuclear power, but because we oppose raising rates for consumers already struggling to afford their utility bills for a plant yet to be built, where we don’t know the actual cost to build, and may or may not even be built in Iowa,”
AARP’s Iowa associate state director for advocacy, Anthony Carroll, added,
“AARP is disappointed the Iowa House of Representatives ignored the concerns of Iowa consumers and voted to advance legislation that substantially shifts the costs and risk to Iowa ratepayers for a possible new nuclear power plant in Iowa. We hope that the Senate will decide to make consumers’ wishes and needs a priority.”
The desire to do the right thing by consumers wouldn’t normally prevail over MidAmerican’s campaign contributions to Iowa legislators, but perhaps public opinion will derail this bill in the Senate. Earlier this week, Friends of the Earth announced results from a Survey USA Iowa poll showing large majorities oppose raising electricity rates to pay for building a nuclear power plant. Republican State Representative Chuck Soderberg dismissed those findings:
“I know what the survey said, I would have liked it to continue and have asked ‘How many Iowans would like to spend $800 million on old, outdated (coal) plants?’ ” he said. “Not many, I don’t think.”
Soderberg also made a misleading claim in defense of the bill he floor-managed:
“This bill does not authorize anyone to build a nuclear facility in the state of Iowa,” Soderberg said. “It does not authorize any utility to increase their rates. That’s the responsibility of the Iowa Utilities Board.”
Yes and no, Mr. Soderberg. Mark Cooper, Senior Fellow for Economic analysis at the Vermont Law School’s Institute for Energy and the Environment, analyzed the proposed Iowa legislation and concluded that they “are among the most aggressive in removing consumer protection as any in the nation. ” In part that’s because the Iowa Utilities Board would not be allowed to apply “the used and useful standard and the least cost principle” when considering an application for a nuclear permit. Also, Cooper noted,
• It excuses the utility from showing that it “has considered other source for long-term electricity supply,” of that the nuclear reactor is “reasonable when compared to other feasible alternative sources of supply,” While it applies such language to all other feasible alternative sources of supply.
• Language that would have allowed alternatives other than nuclear to be selected on the basis of competitive bidding was stricken from the Senate versions.
Final note: the lobbyist declarations on House File 561 reveal some unusual coalitions. Quite a few business groups and corporations supported the bill, but several large companies registered “undecided,” and I noticed WalMart’s lobbyist registered against. Organized labor was split, with the Iowa Federation of Labor, Plumbers and Steam Fitters, Central Iowa Building and Construction Trades Council, and the Great Plains Laborers District Council supporting the bill. A lobbyist representing the South Central Iowa Federation of Labor AFL-CIO registered undecided, while the United Transportation Union and the Iowa Farmers Union registered against.
A lobbyist for some unions backing the bill told IowaPolitics.com, “Our membership is out of work, and they need to find jobs. They see this as a real opportunity to create some jobs and get their people back to work and support their families.” Creating well-paying jobs for union members is a worthwhile goal, but jobs building a nuclear reactor in Iowa won’t materialize for many years, if ever. Nuclear projects around the country have stalled for lack of financing, and I believe there’s a good chance no reactor will be built in Iowa even if House File 561 becomes law. MidAmerican could cancel its nuclear program at any time without giving back money it collected from ratepayers to cover anticipated construction costs. Ramping up energy efficiency programs and other ways to generate electricity in Iowa would create more jobs more quickly. UPDATE: It’s also worth mentioning that this small modular reactor design MidAmerican is touting has not been approved by the U.S. Nuclear Regulatory Commission. There is no guarantee it will ever be approved for construction.
Lobbyists registered against the bill represented the Sierra Club Iowa chapter, the Iowa Environmental Council, the Iowa Beyond Nuclear Coalition, Green State Solutions, the American Association for Retired Persons, the Iowa Council of Health Care Centers, the League of Women Voters, and the Iowa Conference of the United Methodist Church.
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