Branstad pushes for passage of nuclear bill

DES MOINES – Gov. Terry Branstad said Wednesday he would like to see the Senate approve a House-passed bill before Iowa's 2011 legislative session adjourns that would position MidAmerican Energy to attract investment in a proposed nuclear power plant as part of a comprehensive approach to the state's energy needs.

“It would be preferable if the Senate would take action on it before they leave so we could move forward,” Branstad told reporters during an energy forum. “But even at that, as I understand it, it's an eight or nine-year deal, so putting it off I don't think would be the wise thing to do.”

Branstad also said he believed Iowa's ethanol industry could financially manage a federal phase-out of ethanol subsidies provided it was done gradually rather than the way the biodiesel program was abruptly ended in 2009 but then restarted a year later after plants in Iowa had to shut down. The governor also told more than 200 forum participants that he planned to sign House File 672 into law Thursday – legislation that would enhance the state's wind energy production tax credits.

During his forum address, Branstad said Iowa needs a broad, well-reasoned and comprehensive energy policy that will impact business development and job creation decisions.

“All forms of energy production are going to be importance as we look to the future,” he said. “Iowa must find the right balance for sustainable energy solutions that will promote economic growth while preserving our quality, environmental assets.”

Branstad said that mix likely will have to include nuclear in a state that already has a plant that has operated near Palo since 1975.

“I don't think we should have all our eggs in any one basket,” he said. “I just think we shouldn't be ruling out any prospective source of reliable, low-cost energy that can be done in an environmentally safe way.”

Bill Fehrman, MidAmerican Energy president and chief operating officer, addressed the forum by telling participants that federal energy policies aimed at “de-carbonizing” the country are shifting the focus away from coal-fired power plants. He said electricity generated by plants powered by nuclear or natural gas will be more reliable than wind, solar and other alternative forms that also will be a lesser part of the energy mix.

“There's no single answer and keeping all our options on the table for assessment is the best course going forward into the future,” he said.

Fehrman said having a diverse mix of energy sources that includes nuclear would provide a safe, affordable future for Iowa consumers.

“The plants that are operating today were designed back 40 years ago, 50 years ago - in many cases, perhaps, with slide rules,” he said in answering a question from the audience. “Today's plants take all of those lessons learned and have put in place extreme safety measures to ensure that these plants are operable. They're nearly walk-away safe and I'm very comfortable with them.”

Critics have contended that the state should expand more aggressively into renewable energy production rather than pursuing nuclear-generated power, given the unfolding environmental crisis in Japan. They also oppose a provision that would allow the company to collect costs from customers for the plant during construction.

Even if the nuclear bill is approved by the Senate and signed into law by Branstad, the proposed rate increases tied to the MidAmerican project would have to be approved by the Iowa Utilities Board. Company officials say getting a federal license from the Nuclear Regulatory Commission would cost millions of dollars and take at least four years.

MidAmerican official say the proposed legislative changes are needed to help the company attract potential investors and spread out costs – estimated at between $2 billion and $3 billion for the project - 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.

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