MidAmerican Energy ends nuke plant feasibility study early, puts nuclear energy option on hold

MidAmerican Energy abruptly ended its three-year nuclear power plant feasibility study Tuesday (6/4) – four months before a special surcharge on customers' electric bills was set to expire – saying it was premature "to pursue any additional site work on a future generation option, including a nuclear facility."

The utility said it plans to refund $8.8 million of the surcharge to Iowa customers and stop collecting the half-percent charge effective July 1, three months before the $15-million nuclear study fee was slated to expire.

". . . it is premature, given the uncertainty of carbon regulation and the extensive regulatory review for new nuclear reactor designs, to immediately pursue any additional site work on a future generation option, including a nuclear facility," the MidAmerican news release stated. The utility claimed the refund was made possible because it had "effectively managed costs and completed the assessment ahead of schedule."

While MidAmerican filed the feasibility study months earlier than the initial timetable, the company has yet to provide the IUB with ts third and final report on study expenses. Under terms of the surcharge (begun Oct. 1, 2010), the IUB will hold a rate case proceeding "to evaluate the reasonableness and prudence of the cost recovery." The rate case review is to begin "at the conclusion of the cost recovery period, which can extend no more than 36 months in total. . ."

Currently, the three-member IUB is essentially a one-person regulatory body. One of the three IUB seats is vacant, and member Swati A. Dandekar of Cedar Rapids has removed herself from any "substantive decisions of any contested matter before the board" while she explores a run for the U.S. House. Dandekar was in the state senate and voted for the nuclear plant feasibility study rider in 2010.

MidAmerican had sought legislation in 2010 and 2011 to allow charging customers for construction of a nuclear plant prior to completion of the facility, but this year announced it would not attempt to gain approval for the change in state regulations. The legislation generated significant opposition from the Iowa AARP and others, concerned customers, and not company investors, would assume all the risks of such a venture.

Since getting approval for the electric rate surcharge in 2010, the utility has had to submit annual reports on the study expenditures.

The largest "study" expense in 2012 was $1.84 million to obtain options to purchase land in Fremont and Muscatine counties as potential sites for a nuclear power plant. Both sites are approximately 700 acres.

Also part of the nuclear power feasibility study expenses last year was $450,000 paid to a consultant for analyzing whether building a natural gas-fired generating station would be a better idea.

In the required annual report to the IUB last year, MidAmerican also reported paying $447,543 to NERA Economic Consulting, headquartered in New York City. NERA energy consultants have a lengthy record of testifying against U.S. Environmental Protection Agency (EPA) air quality regulations and for Republican-backed energy policies.

NERA's study was for "assessment of the natural gas market for analyzing baseload alternatives to a nuclear generating facility in Iowa; in particular a natural gas combined cycle generating facility."

Whether MidAmerican ultimately gets to charge customers for the NERA Consulting study of natural gas-fired alternatives to nuclear – or a $44,000 bill from a Des Moines public relations firm for a public perception survey on nuclear power in 2011 – is to be decided by the IUB with completion of the study.