Nuclear plant legislation is sound policy and legal framework

By Mark McCormick

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The May 19 guest column, “The unconstitutionality of the nuclear plant bill” by Jim Larew, misrepresents the facts and law in attacking Senate File 390 - pending legislation that would keep nuclear generation as an option for Iowa.

The bill does not authorize the state to issue grants to pay for a nuclear generating facility, to issue any forgivable loans or to make infrastructure investments for MidAmerican Energy.

The bill does not require utility customers to subsidize MidAmerican Energy by paying higher rates before MidAmerican Energy's investment in a facility.

Finally, the proposed bill does not give MidAmerican Energy a blank check, and it does not require customers to pay MidAmerican for unauthorized expenditures.

Let's set the record straight about what is in the legislation. The bill would require MidAmerican Energy to seek permission from the Iowa Utilities Board to build a nuclear facility, if the company first decides that it is in the overall interests of its customers to build a facility. Each year during the planning and construction process, MidAmerican Energy would be required to have its plans for the coming year's expenditures reviewed by the Iowa Utilities Board in advance of making those investments.

The legislation does not authorize MidAmerican Energy to collect increased rates from customers without advance authority from the Iowa Utilities Board. That authority will not be granted unless the Iowa Utilities Board determines that the investments serve the public interest. No subsidy is involved.

If the Iowa Utilities Board authorizes the company's expenditures, customers will pay rates to compensate MidAmerican Energy for making the necessary capital investments needed to provide affordable, carbon-free, baseload power.

Larew does not recognize that regulated utilities are unlike most other businesses. Other business can decide not to build new or replacement facilities simply because the risk of doing so outweighs the potential business opportunities. However, MidAmerican Energy, as a regulated utility under Iowa law, has a responsibility to provide electric service whenever customers want it, at whatever quantity is desired. Electricity cannot be economically stored and must be produced instantaneously to meet demand.

MidAmerican Energy is the No. 1 owner of wind-powered generation among rate-regulated utilities in the United States. While this is important, MidAmerican cannot control when wind energy will be available. MidAmerican also must provide reliable baseload generation

24 hours per day, seven days per week.

People often ask: What about proven technology like coal generation or gas generation?

Existing and pending environmental regulations make it unlikely that any new coal-fueled generation will be built in the foreseeable future. Natural gas-fueled generation is a proven technology and it also has fewer environmental compliance challenges, but we know from events of the past decade that gas, like oil, has a history of price volatility, with prices moving up and down by more than 300 percent during a 12-month period. Such volatility isn't good news for businesses or households, and natural gas cannot meet all of our energy needs.

Senate File 390 preserves the option of nuclear energy for future generations.

Because Larew's views on the law depend on his mischaracterization of SF 390, his opinions on the constitutionality of the bill are wholly without merit.

The proposed legislation does not violate Article III, Section 31, of the Iowa Constitution. That provision restricts appropriation of public funds for private purposes. SF 390 would not appropriate money for private purposes but, instead, passes constitutional muster because it promotes valid public purposes. Nothing in the bill gives MidAmerican Energy the right to take private property without just compensation in violation of Article I, Section 18, of the Constitution.

No taking of private property is involved, and no investments in nuclear power will be made unless the Iowa Utilities Board first determines that the public interest will be served.

Mark McCormick of Des Moines served as an associate justice of the Iowa Supreme Court from 1972 until 1986. McCormick serves as a contract lawyer for MidAmerican Energy. Comments:

mmccormick@belin

mccormick.com.