AmerenUE's fallback position may be in jeopardy

Intro: As the General Assembly mulls over bills to permit AmerenUE to increase its rates to finance a second nuclear power plant, questions continue over the company's plans. RunTime:3:05
OutCue: SOC

At a recent public hearing held in Fulton, large crowds gathered to learn about potential plans to build a second nuclear power plant in Callaway County.

Marcellous and Priscilla Kronk, who are in the real estate business in Fulton, came because they are excited at the prospect of what a new power plant could do for their business.

But the pair didn't know how they felt about the potential of increasing their utility rates to carry the financing costs while the plant is being built.

Actuality: EABKR1.WAV

Run Time: 00:17

Description: Um, hmm. I'm not sure what to think about the increase of rates to pay for the construction of the plant.

Why can't they just give bonds or something if they want to finance instead of raising, instead of increasing the rates. I don't know how people are going to react to that.

The Kronks' question wasn't addressed during a public hearing held by the federal Nuclear Regulatory Commission on the environmental effects of the proposed plant.

But concerns over who would pay for a second plant are being addressed by the Missouri legislature.

AmerenUE is seeking to repeal a state law that currently prohibits the company from passing along financing costs to ratepayers until the plant comes online.

The utility giant says that today's credit market makes it difficult to finance the project without being able to recover financing costs during construction.

A leading critic in Missouri to AmerenUE's effort is also a customer, St. Louis County's Senator Joan Bray.

Bray expresses concerned that Wall Street isn't backing the project.

Actuality: BRAYJ.WAV

Run Time: 00:03

Description: If nobody else wants to take this on, why do the ratepayers have to do it?

Bray raised her question during a Senate committee hearing where AmerenUE's president said the company isn't emotionally attached to the project and hasn't committed to building a new plant.

But Tom Voss said the company is interested in keeping the nuclear option open.

If the state doesn't approve the company's plan to allow financing costs to be passed along to ratepayers, one idea is to see the project through to the licensing stage and then try to sell it to another company.

AmerenUE spokesperson Mike Cleary says the company could recoup its sunk costs even if it decides against building Callaway-2.

Actuality: EABCL3.WAV

Run Time: 00:09

Description: We anticipate that whatever we have spent on a project, it would have some market value. We could sell that to another company, for example, that might decide to build there.

Cleary's boss, AmerenUE's president suggested that the value of a license for a nuclear plant may be as much as a half-billion dollars.

But the utility giant might want to check with the Nuclear Regulatory Commission first.

When asked if there is a market for NRC-approved licenses, NRC spokesman Victor Dricks contradicted the utility's fallback plan.

Actuality: EABDR2.WAV

Run Time: 00:16

Description: No, because they are applying for a license and they have submitted very specific information to us about their financial wherewithal, their design, their planned design, and so I don't know that there's a quote market for something like that.

The NRC spokesman says that it won't rule on the company's license application until 2011.

And that's the earliest that AmerenUE will commit to building a second plant.