Energy demand has been growing and is expected to shoot even higher in the coming years, but the debate over how to pay for new nuclear power plants is likely stalled in the Missouri legislature for now.
As electricity demand has increased, so have utility bills — which has caught the attention of customers and lawmakers alike. Some Missouri policymakers are looking toward nuclear power to fill that need. But finding a way to pay for multi-billion dollar nuclear facilities has been a sticking point in the state legislature this year.
Many Missouri Republicans favor nuclear energy. Speaking at the Capitol in April, Sen. Curtis Trent (R-Republic) called nuclear power plants “wonderful feats of technology” that “harness the power of the atom to give us cheap and reliable and safe electricity.”
However, Republican lawmakers strongly disagree on who should pay the costs for building more power plants and when. There have been debates on both the House and Senate floor over what’s called construction work in progress, or CWIP.
CWIP allows utility companies to charge customers for new power plants as they’re being built and before they generate any electricity. This essentially shifts the financial burden to customers, and away from utility companies, as a project is under construction.
Some lawmakers say the policy can jumpstart investment in more energy production in Missouri. They — and utility companies — also say it can save residents money on utility bills in the long run, by keeping power producers from incurring as much debt and having to ask for rate increases to pay it off.
Others, such as Sen. Joe Nicola (R-Grain Valley) say the opposite — that it’ll place the burden of risky investments on Missourians, and utility bills will still shoot higher.
“I don't agree with using my constituents, rate payers, as a bank for a free interest loan,” Nicola said.
Paying sooner or later
Last year, the Missouri legislature passed a bill allowing energy companies to use CWIP to build gas power plants.
In April, one day after the Missouri House passed CWIP for small modular nuclear reactors, the state Senate — by one vote — approved an amendment to a larger energy bill that would ban CWIP for all nuclear power.
John Coffman, an attorney for the Consumers Council of Missouri, a consumer advocacy organization, said his group supports utilities' ability to invest in nuclear power on their own.
As power plants go, nuclear facilities take much longer to construct, cost more and often run over budget. Coffman contends that, for these reasons, nuclear power plants are a dicey investment, and Missourians shouldn’t have to bear that risk.
“It seems kind of the worst of all possible worlds,” he said. “We're paying for power plants that are no longer serving us, and they're asking us to start paying for power plants that are coming in the future.”
Corporate utility companies are overseen by the Missouri Public Service Commission, which would approve or deny the use of CWIP, as well as adjudicate any price hikes that investor-owned utilities seek. Last year’s CWIP bill included a number of consumer protections that would be enforced by state utility regulators.
Ameren lobbyist Rob Dixon compares CWIP to how the company’s customers might budget for their own big purchases.
“Like paying for something as you go, rather than putting it on a credit card,” Dixon said. “It's going to keep costs lower because you're not paying higher interest over time, and that means utility customers pay less.”
Jonathan Kim has been researching utility profit margins for the Energy and Policy Institute, a national nonprofit utility watchdog. He said CWIP might not make sense for Missourians who are used to getting a good or service when they pay for it.
“When I go to the grocery store, I'm not paying for bananas that I'll get to eat in three years. I'm paying for the bananas I get to eat today,” Kim said.
He said, in theory, corporate utilities should be able to invest in new power plants without customers’ footing the bill upfront.
“Generally, if utilities are making a lot of profit, it means they're doing well for their shareholders and their shareholders are going to provide them more readily with capital to spend on new generation,” he said.
He worries CWIP will incentivize corporate utilities to take risks and disincentivize them from keeping costs down.
“It's not their money that they're playing with. They're playing with customer money. They're playing with the house,” Kim said.
The CWIP debate is likely on hold for now. A staffer for Senate bill sponsor Sen. Mike Cierpiot (R-Lee’s Summit) confirmed to KBIA that the senator does not plan to bring the bill up for a final vote due to Nicola’s CWIP amendment.
Energy and economy
Ameren’s Callaway Energy Center is Missouri’s only nuclear plant. Dixon said nuclear power is a worthwhile investment for the state, evidenced by the fact that the Callaway reactor has been producing energy for more than 40 years.
“Nuclear energy is going to continue to be a vital part of our safe and clean and reliable generation mix now and well into the future,” he said. “I think that continues to receive strong backing from state leaders, both in the executive branch and in the legislative branch.”
Rep. John Black (R-Marshfield) sponsored the House bill to enable the use of CWIP for building small modular nuclear reactors — a relatively novel version of nuclear power wherein the infrastructure is physically smaller than traditional nuclear power plants and produces less power. He told his colleagues in April he’s confident this technology will take off, and he doesn’t want Missouri to miss out.
“They're going to be built. They have to be built to provide the power that we need for the data centers, the growth of industry,” Black said. “We need those in Missouri. We want the construction jobs to build those plants. We want the jobs to operate those plants.”
Avery Frank analyzes energy policy at the Show-Me Institute, a conservative think tank. He agrees Missouri is poised to be a player in a nuclear renaissance, if one were to happen. But he said since small modular reactors are still in development, there will be a lot of first-of-a-kind costs associated with them.
“We're trying to build next generation nuclear technology that we've not really put on the grid before,” Frank said.
Large tech companies have shown an interest in nuclear power to fuel their energy-intensive artificial intelligence data centers. Frank said Missouri should consider allowing businesses such as these to invest in and build their own power.
“Instead of having us ratepayers pay to test out this new technology and absorb all the costs, we could let the private market, who has a lot more to gain from testing one of these new technologies, pay these costs,” he said.
While developing new nuclear power plants could enhance Missouri industry, some worry about the impact it could have on other sectors. Diana Plescia is an attorney for companies that use large amounts of energy, such as Anheuser-Busch, Bayer and Boeing.
Plescia said if lawmakers, and the Missouri Public Service Commission, allow CWIP, it could raise costs for large employers and ultimately hurt economic development.
“It doesn't look good for Missouri to be anti-competitive when it comes to the cost of manufacturing, because that is the base of any economy,” she said.
Plescia said keeping electricity prices low is in Missouri’s best interest and would disincentivize companies from taking their business elsewhere.
“Companies that can move to a state with lower costs, those that are that energy intensive, very well may do it,” Plescia said.
