MidAmerican says it won't seek legislation to bill customers upfront for future nuke plant construction

MidAmerican Energy's president told the Des Moines Register newspaper the company will not seek legislation this legislative session that would allow the utility to bill customers in advance for construction of a future nuclear power plant.

William Fehrman said the utility would not make a third attempt to pass such legislation because "the political support isn’t there," according to the Register article.

MidAmerican Energy – owned by Warren Buffet's Berkshire Hathaway Corporation – had gotten the advanced ratemaking bill approved by the Iowa House two years ago, but it was never brought up for consideration in the Senate chamber. Last year, the bill never made it to the floor in either the House or the Senate.

A number of citizen groups, including the AARP in Iowa, strongly opposed the legislation, saying the change in regulations could result in millions of dollars being spent and paid by customers with no assurance the nuclear plant would even be completed. The IUB staff also raised red flags about the changes to ratemaking regulations.

Fehrman said there is still a possibility the utility will pursue a nuclear power plant in the future.

The state's largest utility is in the final year of a three-year $15-million study on the feasibility of building a nuclear power plant in the state. The legislature approved the study, along with allowing the utility to bill customers for the expense.

As of last November, MidAmerican had spent a total of $4.83 million on the feasibility study, and had collected $10.6 million through the electric rate surcharge on customers' bill as of Sept. 30. The utility plans to retain the excess collected so far because it says expenses in 2013 may exceed the $15 million allowed to be collected before the surcharge ends this September.

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 Iowa Utilities Board (IUB), MidAmerican 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 – will be decided by the IUB after completion of the study in 2013. The IUB will convene a rate case hearing to examine expenses incurred by the utility and determine if the spending was appropriate under the legislation.

CLICK HERE for the Des Moines Register article on the nuclear plant legislation.