DES MOINES – The leader of MidAmerican Energy said Thursday that a delay by state lawmakers in approving the company’s request for legislation this session that would help attract potential private investors needed to build a nuclear power plant in Iowa likely would hurt and slow the process but would not kill the project.
“We have not made any decision to build,” MidAmerican Energy President William Fehrman told reporters after an hour-long meeting where he worked to allay public concerns that have risen as Japan battles a nuclear crisis in the wake of this month’s devastating earthquake, tsunami and aftershocks. “We have a lot more to assess and a lot more to understand before those decisions are made.”
“We have concluded that the state of Iowa can be a host for a new nuclear power plant,” he added, noting that the current site of a nuclear power plant near Palo is among the potential sites being considered for a second facility in Iowa.
Fehrman appeared before a Senate Commerce subcommittee hearing packed with Iowans on both sides of the issues to promote Senate File 390, a bill he said would help address hurdles that might impeded MidAmerican Energy’s exploratory plans to build a nuclear-powered facility costing $1 billion to $2 billion employing new technology that consists of a cluster of small modular reactors rather than the large-scale structure currently besieged with major problems in Japan.
“The technology we’re talking about here is significantly different from what’s being used in Japan and because of that I have more comfort about where we’re heading with this alternative,” he said.
The utility executive told lawmakers that costs for MidAmerican’s 600,000 customers likely will be going up in the future – the first rate increases since 1995 — whether the company proceeds with a nuclear option due to changing requirements for coal, gas, wind, solar and other methods of generating electricity. He said the company’s customers likely will see their electricity bills increasing by 10 percent over the next decade.
Fehrman said the proposed legislation is intended to help the company attract potential investors and spread out costs to avoid a “rate shock” that would come if customers saw a spike on their monthly utility bills once the proposed project became operational by 2020.
However, not everyone came away convinced.
Sen. Rob Hogg, D-Cedar Rapids, said the fact that the Iowa utility won’t know until 2015 or 2016 whether federal regulators will approve the new technology MidAmerican wants to employ tells him there’s no rush for the Legislature to act this session.
“It makes no sense for us to take up this bill this year or next year when they’re going to have to wait four of five years for the technology to be approved anyhow,” Hogg said.
Sen. Joe Bolkcom, D-Iowa City, said he was concerned that the legislation appeared to place all the liability on ratepayers to pay for the new plant’s construction while effectively ensuring a recovery of the company’s costs. There also are safety concerns he would like to have addressed by a “third-party validator” and concerns over what is happening in Japan has “provided some extra space to have that conversation,” he said.
“This is a generational decision. It’s a multi-billion dollar decision so the Legislature ought to take more than a couple of meetings to decide it,” Bolkcom added. “This is a big deal. This is a huge decision for the state. In light of what’s going on in Japan, I think we need to take our time and do our due diligence and get more members more knowledgeable about the proposal and the impact on ratepayers.”
Republican leaders supported further exploration of nuclear power options in Iowa, but they told reporters the discussion at the Statehouse has changed due to recent events in Japan.
“I think the Legislature is taking the appropriate steps to make sure what happened in Japan doesn’t happen here,” said House Speaker Kraig Paulsen, R-Hiawatha. “I think the events that are taking place in Japan alter the discussion a little bit.”
Senate GOP Leader Paul McKinley of Chariton said he believes the Legislature is taking the proper steps to make certain what is happening in Japan would not happen in Iowa given the technological advances.
“I don’t know if it will take rolling blackouts for people to finally do something, but we’d better get serious about getting base-load generation. If we’re going to grow our economy, we’re going to have to have reliable, affordable, sustainable electric generation. Those people who are playing politics with this are playing politics with the people of Iowa,” he said.
However, Maggie Rawland, a Des Moines woman who attended Thursday’s hearing in opposition to nuclear energy, said proponents made the same argument 40 years ago that the technology currently in use in Japan was safe.“They’re making a big mistake here in this Legislature if they think they can ignore people,” Rawland said. “So far, they’ve been more listening to the money that is coming into play from the big contractors and the utility companies. Now that the public is concerned and alerted to what’s happening, they should be listening to the people. We are going to trump the money interests. Organized people will trump the organized money from here on in if we can only have some hearings.”