MidAmerican drops plans for nuclear power plant (updated)

Bullet dodged: MidAmerican Energy announced yesterday that it will not pursue plans to build a new nuclear power plant in Iowa. Details are in this front-page story in today's Des Moines Register. MidAmerican was conducting a three-year feasibility study (paid for by its customers) and had considered sites in Fremont and Muscatine counties for a nuclear power plant. However, utility officials determined that federal officials have not approved the modular design MidAmerican wanted to build. (They can't say they weren't warned.)

I encourage you to click through and read the whole Register article by Perry Beeman and William Petroski. Excerpts are after the jump. Thanks to the environmental organizations and AARP, which fought MidAmerican's efforts to bill ratepayers in advance for building a nuclear power plant. Legislation toward that end cleared the Iowa House in 2011 and an Iowa Senate committee the following year but never came up for a vote in the full Senate amid strong Democratic opposition.

Last month MidAmerican announced a planned $1.9 billion investment in wind energy, which "will add up to 1,050 megawatts of wind generation and up to 656 new wind turbines in Iowa by year-end 2015."

UPDATE: MidAmerican's feasibility study is online here (pdf). The company's official statement and excerpts from Dar Danielson's report for Radio Iowa are now after the jump.

SECOND UPDATE: Added local reaction from Joe Jarosz's report for the Muscatine Journal.

"MidAmerican decides against Iowa nuclear plant," from the June 4 Des Moines Register:

The utility has decided against building any major power plant. That's because there is no approved design for the modular nuclear plant it envisioned, and there are too many questions about limits on carbon emissions from a natural gas plant, the company said.

"We opted for what was in the best interest of our customers," MidAmerican vice president for regulatory affairs Dean Crist told The Des Moines Register. [...]

The lack of an approved design for the new plants is another major reason few reactors are expected to be built in the next decade.

MidAmerican will ask the Iowa Utilities Board to approve a refund and cancel on July 1 the special charge ratepayers paid for the study. The utility collected $14.2 million over several years, and it will return the $8.8 million it didn't spend on the site and market analysis, tests, and the like.

The money would be refunded over a year, beginning in August.

MidAmerican plans to let its land options expire, and will sell a couple of Muscatine County properties it bought for soil tests.

Crist said it probably will be toward the end of this decade before the utility takes another hard look at a major power plant project.

Statement posted on MidAmerican's webiste:

MidAmerican Energy Announces Iowa Nuclear Feasibility Assessment Results

DES MOINES, Iowa - (June 4, 2013) - MidAmerican Energy Company has completed its nuclear feasibility study and is sharing the results with Iowa regulators, local officials, landowners and the media. MidAmerican Energy also is proposing to refund a substantial amount of the funds collected to conduct the assessment.

The nuclear feasibility study, which has been underway since 2010, resulted in several conclusions: (1) there are viable sites in Iowa that are potentially acceptable for a nuclear generation facility; (2) new small modular reactors can be a cost-effective alternative to other forms of generation when carbon emissions are constrained or taxed; and (3) new nuclear technologies will offer significantly enhanced safety capabilities. The study also concluded that it is premature, given the uncertainty of carbon regulation and the extensive regulatory review for new nuclear reactor designs, to immediately pursue any additional site work on a future generation option, including a nuclear facility.

The assessment was submitted to the Iowa Utilities Board on June 3. Because MidAmerican Energy effectively managed costs and completed the assessment ahead of schedule, the company has requested the Iowa Utilities Board approve a plan that allows MidAmerican Energy to refund $8.8 million of the funds collected from its Iowa customers and to stop collecting the half-percent charge for the assessment, effective July 1, three months earlier than planned. The refund and elimination of the half-percent charge for the nuclear assessment will result in a slight decrease in Iowa customers' bill amounts starting this summer.

In 2010, MidAmerican Energy worked with state regulators, the Office of Consumer Advocate and political leaders to enact a law that authorized an assessment of nuclear generation potential in Iowa. The assessment began in 2010. Since that time, MidAmerican Energy identified various sites that met rigorous nuclear regulatory requirements throughout the state and eventually narrowed the locations to two sites for additional testing. In fall 2012, soil and environmental assessments were taken in Fremont and Muscatine counties to assess land suitability in the event a determination was made to develop a generation facility.

Based on the assessment's results, no land in Iowa will be purchased by MidAmerican Energy at this time to develop a nuclear generation facility. MidAmerican Energy's land options in Fremont County will expire, and the company will not pursue an extension on its land options in Muscatine County. The two rural residences that MidAmerican Energy currently owns in Muscatine County will be put up for sale later this year.

MidAmerican Energy will continue to assess and review all sources of generation in order to continue finding ways to serve its customers and remain a low-cost energy provider. MidAmerican Energy's recent announcement to build additional wind generation is one example of how the company is pursuing options to keep future costs down for customers. If approved by the Iowa Utilities Board, the wind expansion will reduce future customer rates by $10 million a year in 2017, starting with a $3.3 million reduction to customer rates in 2015.

MidAmerican Energy Company, Iowa's largest energy company, provides electric service to 734,000 customers and natural gas service to 714,000 customers in Iowa, Illinois, Nebraska and South Dakota. It is headquartered in Des Moines, Iowa. Information about MidAmerican Energy is available on the company's website, Twitter, Facebook and YouTube pages, which can be accessed via www.midamericanenergy.com.

From Dar Danielson's report for Radio Iowa:

He says they also found a nuclear plant could compete with a natural gas plant if a carbon tax is in place. Crist says they looked at all those factors in deciding whether to take the next step.

"What we chose to do at the end here is to pause while environmental regulations take on more certainty - so we know what those are - natural gas prices, those sort of things. We feel it is appropriate to end the study now and not continue on with further development at this time," Crist says.

Crist says it will likely be several years before the company makes any decision on building either a new natural gas or nuclear plant.

"I think it'll be closer to the end of this decade before we decide what to build," Crist says. "As we get more clarity around environmental regulations, as we get more clarity around natural gas supplies and related costs, all that will feed into the analysis of what's best interest of customers."

SECOND UPDATE: Joe Jarosz reported from Wilton in Muscatine County,

Dianne Glenney of Wilton helped found the group Saving America's Farmland and Environment, which is opposed to constructing a nuclear plant on Muscatine County farmland. She said she let out a big sigh of relief when she heard MidAmerican's announcement.

"Safety was always our top priority," Glenney said, adding that the lives of Wilton residents were far more important than any potential economic impact on her community. "Any accident would've wiped out five million acres." [...]

When reached for comment Tuesday, Scott Sauer, a member of the Muscatine County Board of Supervisors, said he had not read the press release yet, but said his position has never wavered. Sauer believes companies like MidAmerican Energy should use old power plant sites before considering building new plants, encouraging companies to do so with tax incentives to rebuild on those sites.

"I don't want to see new construction on new sites and take existing agriculture ground out of commission," Sauer said. "I never understood why they would do that."

Jeff Kaufmann of Wilton is a former Republican state legislator and current member of the Cedar County Board of Supervisors. He said that even with Tuesday's news, MidAmerican Energy continued to show poor communication skills with the public.

"All the major stakeholders (legislators, board of supervisors, members of S.A.F.E), MidAmerican didn't have the courtesy to call, and made them read about it through a press release," Kaufmann said, adding he even heard a rumor that the company conducted the feasibility study to receive the rate increase they were given. "I hope they did not put the community through this just so they would have a narrative to justify a rate increase."

Kaufmann, who has worked with S.A.F.E., said Glenney and the group are a model for the community and has his utmost respect. He said that at the beginning of the study, he didn't know a lot about nuclear energy but learned much from the group.

I wish Kaufmann had educated himself more about nuclear energy before voting for the bill MidAmerican was pushing in 2011.

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