AARP survey: Older Iowans oppose advance ratemaking approach

DES MOINES – A majority of older Iowans oppose legislation that would shift the financial risk for building a proposed new nuclear power plant from MidAmerican Energy shareholders to the utility's consumers, according to results of a poll conducted by AARP Iowa that were released today.

Anthony Carroll, AARP Iowa associate state director for advocacy, said Iowans aged 50 years or older are not opposed to nuclear power, but they object to a House-passed advanced ratemaking bill (House File 561) awaiting action by the Iowa Senate that would allow MidAmerican to charge ratepayers more on their monthly electricity bills even if the proposal to build a nuclear facility using advanced modular technology never reaches fruition.

A telephone survey of 400 likely Iowa voters aged 50 or older conducted by Selzer & Co. between May 23-25 found that 72 percent of the respondents were opposed to the proposal with 52 percent strongly opposed and another 20 percent were somewhat opposed to the advanced ratemaking concept being envisioned for the new nuclear plant, said Carroll. The margin of error was plus or minus 4.9 percent in the survey commissioned by AARP Iowa - a nonprofit, nonpartisan statewide organization representing the interests of older Iowans.

In addition, 57 percent of the survey participants said they would be less likely to vote for a state lawmaker who supported such a proposal. In recognition of the far-reaching effects of this legislation, AARP has designated H.F. 561 as a “key vote” and will be informing its members and the public on how each member of the Iowa Senate votes on the bill if it is taken up before the prolonged 2011 session ends.

“With nearly three-fourths of voting older Iowans voicing opposition to allowing advance ratemaking in Iowa, lawmakers need to find a way to ensure that the state will be able to meet our growing needs for energy without saddling ratepayers with unknown, uncapped cost burdens that put all the risk on consumers,” Carroll told a Statehouse news conference.

“Nobody protects the consumers,” added Peter Hawthorne, a Des Moines resident who attended today's event.

The AARP-commissioned survey asked respondents to evaluate three consumer protections that AARP has advocated as amendments to the proposed bill.

More than three-quarters (79 percent) said allowing refunds to customers if the project was canceled would make the proposal better; 75 percent said requiring a cost comparison of electricity options for increasing energy service in Iowa before moving forward with a nuclear plant would improve the proposal; and 74 percent said including a limit or cap on how much the utility could charge consumers would make the proposal better.

“Throughout this debate, AARP has said our opposition is not to any particular power plant, but to the language of H.F. 561, which significantly shifts risks from utility companies and their shareholders to ratepayers,” Carroll said. “Iowa residential consumers are already struggling to afford their utility bills, and we need to ensure that this legislation includes provisions that enhance, not weakens Iowa's consumer protections.”

The survey indicated that older voters' concerns about utility costs topped the list of the three common expenses that included cost of mortgage or rent, cost of food, and cost of energy, AARP officials said.

“With 65 percent saying they are extremely or very concerned about the cost of their electricity going up, and another 26 percent saying they are somewhat concerned, Iowa lawmakers need to approach revising Iowa's energy ratemaking policies very thoughtfully with consumers in mind,” said Carroll.

He noted that 56 percent of voters think the Iowa Utilities Board should have the most say in setting home energy prices for consumers. However, the proposed legislation would limit the ability of regulators to protect the interests of consumers, he said.

“It is important that Iowa senators realize the consequences of their vote and the effect this bill will have on the Utilities Board's power to protect consumers,” said Carroll. “Lawmakers need to be aware the Iowa Utilities Board has said that given the legislative intent supporting nuclear power in the proposed legislation, it would be difficult for the board to deny any ratemaking principles for a nuclear plant.”

MidAmerican officials have said 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.

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 Gov. Terry 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 and the plant likely would be completed by 2020 at the earliest.

Carroll said the survey results are particularly relevant since a top Senate leader indicated last week that H.F. 561 remains a “live round” as lawmakers work in overtime session to resolve the few remaining bills standing in the way of adjournment. The biggest unresolved issues continue to be the state budget and tax relief for commercial property owners.

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