Mayor's letter to Ameren chief crossed line
By KEN MIDKIFF
Published Friday, February 20, 2009
(http://www.columbiatribune.com/news/2009/feb/20/mayors-letter-to-ameren-chief-crossed-line/)

Here’s what Tom Voss, CEO of AmerenUE, had to say in July 2008 about the construction of another nuclear power plant, tagged Callaway 2:

“We just couldn’t do it. The risk would be too great. We don’t think people would lend us the money. We don’t think our board of directors would approve it. And we don’t think our stockholders would think it’s prudent.”

And here’s what the mayor of Columbia had to say in October about his support of Callaway 2: “I also look forward to the economic opportunity created by your proposal. The potential jobs associated with the plant during construction and operation will be welcomed by families throughout the Mid-Missouri region. When construction is complete, this additional energy resource should attract new employers and build a firm, diverse economic foundation.”

In the future, we might be debating the pros and cons of a nuclear power plant (and there are arguments for and against), but right now the main question is: “Who pays?” Whatever the case, CEO Voss made his statement before Mayor Darwin Hindman sent his letter, so Hindman clearly knew Voss was, in effect, in favor of repealing no-CWIP and passing construction costs along to consumers.

AmerenUE is set to pass the costs along to current consumers of its electricity via increased rates. Indeed, Voss recently repeated his statement that Callaway 2 wouldn’t be built without a repeal of the law that prohibits charging consumers on the construction of an electricity-generating plant until that plant is operating and producing power. Some say this only applies to interest. But if no one will grant AmerenUE a loan, then there will be no interest. Others assert that the no-CWIP law prohibits charging any amount for construction. In any event, the current bills to repeal no-CWIP allow AmerenUE to charge consumers the full costs of construction for Callaway 2.

The no-CWIP law, passed by a 2-1 vote of the people of Missouri way back in 1976, is referred to as the No Charge for Construction Work in Progress, or no-CWIP. The reasons for its passage in that long-ago year are still valid today — even though nuclear power plants might be arguably safer. At this point, the arguments about safer or not are not on the table. “Who pays?” is.

Hindman made it clear in his letter to Voss that he was the mayor of Columbia and was expressing his personal opinion. He can’t have it both ways. Either he is relaying the position of the Columbia City Council, or he is expressing his personal opinion. Because he sent the letter on city stationery on which he is identified as the mayor of Columbia (and he identified himself that way), the clear perception is he was passing along official city sentiment.

But he was not. The city council had never discussed this issue and had certainly taken no position. If the mayor wishes to express his personal opinion, he is free to do so as a private citizen — on his own time, using his own resources, his own stationery and as a private citizen.

Why did Mayor Hindman write a letter to Voss? Did he have nothing better to do one October afternoon and say to himself, “Gee, I think I’ll write a letter to Tom Voss,” or did he do this at the request of AmerenUE? Are the lobbyists for AmerenUE carrying packets of letters of endorsement around in Jefferson City to build a case for repealing no-CWIP?

Even the statements Hindman made in his letter to Voss are controversial, perhaps false.

For instance, politicians are all about jobs, jobs, jobs, but repealing no-CWIP will likely result in more jobs lost than are created. Industries are among the heaviest users of electricity, and if industries were charged a much higher rate (estimates are about 30 percent higher), then those industries would lay off employees or leave the state for a net loss in jobs. No doubt, Fulton would benefit while St. Louis would lose. Columbia would probably break even: Jobs would be gained, and jobs would be lost.

There is also the nagging problem of those consumers who, while paying higher rates during construction, would never derive any benefits from Callaway 2. It is unlikely that those who die before the plant produces electricity will complain very much (unless it is from beyond the grave), but those who move away — and we are a transient society — would complain and do so bitterly. Although it is relatively easy to determine the refunds that such people should receive, there is nothing in either AmerenUE’s Missouri House or Senate bills that would require that AmerenUE give any money back beyond a four-month bill adjustment.

Likewise, what would happen if for some reason Callaway 2 were never completed? This is not a rhetorical question — more than 50 percent of nuclear power plants are left uncompleted and never produce 1 kilowatt of electricity. Would those who paid a higher rate during uncompleted construction get their money back? Hah!

Finally, there is the matter of “risk.” If Callaway 2 is deemed to be too much of a risk for conventional funding sources, why would AmerenUE try to burden consumers with such a risky funding mechanism. If it’s too much of a risk for banks, it should be too much of a risk for consumers. If the stockholders of AmerenUE deem it to be imprudent, why is it prudent to stick consumers with the costs?

All of the reasons detailed above were considered during the original no-CWIP passage. These considerations hold true today. No-CWIP should not be repealed. AmerenUE is a private company and one that should not be allowed to pump up its bottom line at public expense.