Opponents of nuclear bill draft slew of pro-consumer amendments

Democratic opponents of a bill designed to promote nuclear power in Iowa have drafted a dozen amendments to House file 561, in case the bill comes up for debate in the Iowa Senate. The bill squeaked through the Iowa Senate Commerce Committee earlier this month. After the jump I’ve posted summaries of the proposed amendments, which would strengthen consumer protections and possibly deter MidAmerican Energy from pursuing a new nuclear reactor project.

State Senators Rob Hogg and Joe Bolkcom have long been among the Senate’s most vocal critics of the nuclear bill. Last week they toured Iowa to warn about the “severe financial risk” that House File 561 poses to Iowa consumers. Radio Iowa and the Cedar Rapids Gazette summarized key points from those events. Here’s a video from the press conference announcing the tour:

Hogg and Bolkcom are fighting to keep House File 561 from coming up for debate in the Senate. During the 2011 legislative session, a similar bill cleared the Senate Commerce Committee but never came before the full chamber. Senate Majority Leader Mike Gronstal is favorably inclined toward the nuclear power bill but hasn’t committed to bringing it up for a vote this year.

This week Hogg focused on changing the terms of the bill, in case it comes to the Senate floor. On March 26 he announced five pro-consumer amendments. Here is a video from Monday’s press conference:

Here is a press release explaining the amendments.

Consumer Protection Amendments Would Make Nuclear Bill Less Risky To Iowa Families And Businesses

DES MOINES – A group of amendments to protect consumers from the severe financial risks inherent in building a nuclear power plant were filed today by State Senator Rob Hogg of Cedar Rapids.  The amendments to House File 561 include measures that would cap the costs that can be collected from ratepayers in advance of operation, exclude certain categories of customers from paying any costs incurred before the proposed nuclear plant opens, and provide refunds to all customers if the plan is cancelled or never put into operation.

“It is not accurate to say that this legislation protects consumers,” said Hogg.  “These consumer protection amendments, if adopted by the Senate, would reduce the severe financial risk that House File 561 currently poses to Iowa families and businesses.”

Hogg said Iowans should be skeptical of claims about consumer protection by nuclear supporters.  Last year, the legislation was approved by the Senate Commerce Committee on a 13-2 vote.  This year, the version of the bill which supporters claim is more consumer friendly was narrowly approved by an 8-7 vote.   House File 561 could be debated by the full Senate at any time.

“This legislation still forces Iowa consumers to take on the financial risk that Wall Street has already rejected,” said Hogg.  “The financial risks associated with design, licensing, permitting, and construction of a nuclear power plant are in the billions of dollars.  If nuclear is too risky for Wall Street investors, it is too risky for utility customers.”

The unusual legislation would require MidAmerican to apply to build a nuclear power plant.  After approval by the Iowa Utilities Board, the bill takes another unprecedented step: MidAmerican would immediately begin recovering costs and profits from customers, even if the proposed plant never generates a single kilowatt-hour of electricity.

– end-

CONSUMER PROTECTION AMENDMENTS

TO THE NUCLEAR RATEPAYER FINANCING BILL (HF561)

State Senator Rob Hogg, March 26, 2012

The nuclear ratepayer financing bill (House File 561) creates severe financial risk for utility customers by shifting the cost and the risk of a new nuclear plant to utility customers by guaranteeing cost recovery and profits for the utility owners, even if the plant never generates a single kilowatt-hour of electricity.

The best consumer protection is to reject the bill, and let utilities develop future power plants under current law, rather than passing special legislation with special exemptions and special rules for nuclear plants.

If a bill is to be debated, however, there are meaningful pro-consumer amendments that could be adopted.  They include:

*       Hard Cap On Dollars Collected – Consumers need a hard cap on dollars collected to guard against excessive costs and cost overruns.  An amendment being filed today would impose a $50 million cap on the amount that could be recovered before a nuclear plant is put in operation.

*       Exclude Categories of Customers – It is unfair for certain customers to be asked to take the risk of a nuclear plant.  An amendment being filed today would exclude cost recovery before operation for low-income customers eligible for LIHEAP assistance.  Other categories of customers should also be excluded, but clearly low-income customers should not be asked to take the financial risk of investing in nuclear power.

*       Refund If Plant Never Operates – If the plant never operates, the money collected should be refunded to keep the risk of plant failure on the utility owners.  An amendment being filed today would require the utility to refund all money collected if the plant is cancelled or never put into operation.

*       Delete Cost Over-Run Language – The bill currently contemplates that a nuclear plant will experience cost over-runs by directing the Iowa Utilities Board to review filings “with the understanding that some cost components may be higher than estimated.”  (House File 561, p. 6, lines 20-21).  An amendment being filed today would delete the cost over-run language.

*       Delete Nuclear Exemption from Consideration of Alternatives – The bill currently exempts a nuclear plant from the requirement under current law that the Iowa Utilities Board compare a proposal to alternative sources of electricity to determine whether the proposal is “reasonable.”  (House File 561, p. 8, line 32 to p. 9, line 7).  An amendment being filed would delete this special exemption.

Speaking to James Q. Lynch of the Cedar Rapids Gazette, Hogg said he “thinks the chances the bill gets to the Senate floor are less than 50 percent. If it does, he said, his amendments will prevent Iowa consumers shouldering all the risk associated with MidAmerican Energy building a small-scale nuclear plant to generate electricity.” I can’t imagine how MidAmerican could finance construction of a nuclear power plant if they could only bill ratepayers for $50 million before the start of operation. They’d never be able to secure the rest of the financing. Remember, this project would take many years to complete. The U.S. Nuclear Regulatory Commission hasn’t even approved the small modular reactor design MidAmerican wants to use.

Senate Commerce Committee Chair Matt McCoy indicated on Monday that he is open to some of Hogg’s amendments, but I’m sure he wasn’t happy to see the others proposed this week by Hogg and Senator Pam Jochum. Hogg sent me the following summaries by e-mail. Jochum filed three amendments:

–        No Nuclear Plant Built Within 50 Miles Of A City Of 10,000 Or More (S-5139) – The Fukushima disaster required an evacuation of 50 miles from the site of the disaster by US military personnel. This amendment would prohibit construction of a new nuclear generating facility within 50 miles of a city of 10,000 or more to minimize the number of people to be evacuated in the event of a disaster

–        No Nuclear Plant Built Within 50 Miles Of Dairy Farm (S-5139) – This amendment would prohibit construction of a new nuclear generating facility within 50 miles of a dairy farm.

–        Require Vote Of County Before Plant May Be Built (S-5137) – Local voters should have a say over whether to build a nuclear plant in the county where they live.  This amendment would require a vote before the plant could be approved.

If the Senate approved a bill containing any of those amendments, I think MidAmerican would throw up its hands and walk away. It makes more sense for the company to replace its aging coal-fired power plants with new natural gas-powered facilities.

Hogg filed the following additional amendments:

–        No approval unless adequately-sized permanent waste repository (S-5134):  This amendment would require the IUB to determine that the United States has a permanent waste repository sufficient in size to accommodate the waste from this plant and other existing and anticipated plants before the application could be approved.  This amendment is necessary to avoid enormous safety and financial risks from nuclear waste generation.

–        No approval until sufficient and safe supply of domestic uranium (S-5131):  This amendment would require the IUB to determine that there is a sufficient and safe domestic supply of uranium before the application could be approved.  This is necessary to avoid future dependence on foreign uranium and future liability and costs for health and safety impacts in uranium mining.

–        No approval until approved safety and security plan (S-5132):  The bill currently allows the IUB to approve a plan if the applicant “commits to prepare” a safety plan (House File 561, page 11, lines 24-25).  This amendment would require the applicant to have the safety and security plan in place before the application is approved, and further would require the plan to “ensure against accidental radioactive release, theft of nuclear materials, or terrorist attack against the facility.”

–        No approval without greenhouse gas offsets (S-5133):  The proponents of nuclear power contend that nuclear is “carbon free.”  If true, this amendment should be a “non-con” amendment.  This amendment would require the IUB to determine the greenhouse gas emissions in the nuclear fuel cycle and require offsets of any emissions before the application could be approved.  This is necessary to make sure that Iowa does not develop nuclear plants under the false impression that nuclear is somehow “carbon free.”

Having these amendments in play increases the potential risk for both sides in this debate. Opponents of the nuclear bill might worry that passing a few pro-consumer amendments will help generally bad legislation move forward. By the same token, supporters of the bill might worry that House File 561 would become too watered down during Senate debate to serve the interests of MidAmerican.

I don’t believe that all of Hogg’s and Jochum’s amendments would receive 26 votes on the Senate floor, but I suspect that some of them would. In any event, passing the bill without any additional consumer protection appears to be off the table. McCoy told Lynch,

Supporters want Democrats and Republicans to put up an equal number of votes.

“That’s a bit of a challenge for us because at this time there’s firmer support on the Republican side,” he said. “So the question is can we bring some people along with Sen. Hogg’s amendments.”

Any relevant comments are welcome in this thread.

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