MidAmerican Energy customers would see their power bills rise 10 percent over a decade to pay for the investor-owned utility’s share of a proposed Iowa nuclear plant, the firm’s president told lawmakers Thursday.
That doesn’t include what the utility would pay for new generation from wind or other fuels.
William Fehrman fielded questions from lawmakers about a proposed 1,000 to 1,600 megawatt nuclear plant to be built by MidAmerican and partners at an unspecified Iowa site. Among the spots under consideration, Fehrman acknowledged Thursday: the area surrounding Iowa’s only nuclear plant, Duane Arnold Energy Center in Palo near Cedar Rapids.
Senators on a commerce subcommittee questioned if the nuclear disaster in Japan should delay work in Iowa.
Fehrman said the difference between the modular, build-in-chunks plant MidAmerican is eyeing and the old technology in Japan is like the difference between a smart phone and a rotary dial model. He said the bill is needed to keep nuclear as one of the utility’s options and to attract investors.
Regarding rates, Fehrman said Iowans will pay more no matter how the utility decides to address energy needs as the state grows and federal environmental regulators make burning coal a more expensive proposition.
“There is no doubt that costs are going to go up,” Fehrman said, noting the utility hasn’t raised rates since 1995. “We need to keep them down as much as possible.”
Fehrman said the utility would hold down costs by selling excess power from the plant. He added that most of the rate increase attributed to the plant would come in the latter part of the decade.
A recent study by the Illinois Commerce Commission listed nuclear as one of the cheapest power-generation options based on the price per kilowatt hour, Fehrman said.
The plant, if approved by the Iowa Utilities Board, would come online in late 2020 at the earliest, Fehrman said.
Sen. Swati Dandekar of Marion said Iowans are concerned about paying for a project that may cost more than the utility thinks, given the nation’s record on cost overruns at nuclear plants.
“There is no doubt there is a history of cost overruns in this industry,” Fehrman said. “We’ve asked for more oversight of this project, and that’s in the bill.”
MidAmerican is pushing legislation that would set some of the rate-making
principles to be applied to the plant, in effect telling investors how the utility would recover its expenses.
Opposition to the bill continued to mount Thursday. The Iowa Sierra Club, with its lawyer in tow, delivered 160 letters opposing the legislation to Gov. Terry Branstad. “At this time of unspeakable tragedy and unimaginable chaos in Japan, Iowa is still considering promoting nuclear power,” said Pam Mackey-Taylor, who leads the chapter’s energy efforts. “Nuclear energy is not the answer.”
Only senators were allowed to speak Thursday, but AARP was prepared to speak against the bill. “AARP believes it is unfair to consumers and bad policy for the Iowa General Assembly to enact legislation that would allow utility companies to charge consumers in advance for costs of a new plant before it is in service, and require consumers to continue to have to pay even if the plant development is canceled, or goes over budget,” the group representing senior citizens said in a statement. “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.”
Fehrman acknowledged that ratepayers would cover expenses for the project even if it is canceled.
Representatives of the Iowa Environmental Council attended Thursday’s session.
