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Debate over CWIP moves from legislature to airwaves

This article first appeared in the St. Louis Beacon, April 3, 2009 - State Sen. John Griesheimer voted to send a controversial bill on funding a nuclear power plant out of committee, but don't think he is looking forward to attending a signing ceremony any time soon.

In fact, the Republican from Washington, Mo., has denounced the legislation -- SB 228 --- as "a fiasco from day one" and flatly declared that "there's no way it's going to pass this year."

So why did he want it to go to the Senate floor for full debate? Welcome to the wonderful world of CWIP, which stands for construction works in progress but could just as easily signify Contorted Words In Politics, Jefferson City style.

The bill was introduced at the urging of AmerenUE to make it easier for the utility to build a second nuclear power plant in Missouri -- if it decides it really wants to. To make the project viable, Ameren says, it must be able to charge ratepayers for the money needed to finance the $6 billion plant even before it begins to generate power.

Because of a proposal approved overwhelmingly by voters in 1976, that practice is against the law in Missouri. The bill advanced by the Senate Commerce Committee on Tuesday would reverse that vote, but it would also do a lot more that consumer groups, big industrial customers of Ameren and utility regulators say goes too far.

Ameren officials insist they haven't even decided yet whether to go ahead with the project; they also say that without CWIP, the plant known as Callaway 2 probably won't ever happen. But that hasn't stopped lively discussion on both sides, including a controversial TV ad that Ameren went to court to try to block and a reply featuring longtime TV newswoman Karen Foss, now an Ameren executive.

The 6-4 committee vote -- with Griesheimer casting the deciding "yes" vote -- shows how close the issue is. Judging by the rhetoric on both sides, the often strident debate is far from over.

Odd coalitions

The original bill, introduced by Sen. Delbert Scott, R-Lowry City, received a sometimes-rocky reception. Consumer groups said it would force them to pay too much and take on a role that more properly belonged to Ameren shareholders. Environmental groups said that instead of spending so much money on nuclear power, utilities should concentrate on renewable energy sources, such as wind and solar, plus increased energy efficiency.

Ameren's case was based on two arguments: Missouri is going to need new sources of energy, and nuclear power is a safe, reliable way to generate it. To be able to pay for the plant, the utility would need to be able to charge ratepayers for planning, application and financing; customers could either pay smaller increases upfront, while the plant is being built, or larger ones later one when it goes online. Labor groups backed the utility, saying that the jobs the plant would bring are crucial in tough economic times.

Early hearings on the Senate bill -- and parallel legislation introduced in the House -- prompted changes before it was brought up for a committee vote. The revisions were designed to answer criticism that the role of the Public Service Commission had been reduced, undermining safeguards for consumers.

But for opponents of the bill, the changes did not go anywhere near far enough.

"This carves out a unique process that bypasses, shortcuts and alters the system we have now," said state Sen. Joan Bray, D-University City, one of the four votes against sending the legislation to the Senate floor. "I have a real problem with that.

"We have allowed more and more surcharges outside of regular rate cases. This bill takes that trend to a new height. I think our Public Service Commission has done a great job in regulating the utilities in Missouri. We have very strong utilities now, and rates have been low."

To state Sen. Jim Lembke, R-Lemay, another "no" vote in the committee, the bill was too one-sided in favor of Ameren.

"It allows them to walk away from the project and not have to refund to ratepayers what has been charged to them up to that point," Lembke said.

He said he is sympathetic to the utility's need to be able to generate more power to meet Missouri's future needs, but as debate on the bill unfolded, his initial favorable impression shifted.

Noting developments that would make construction of new coal-fired plants difficult if not impossible, Lembke said that there must be a balance between what Ameren will need in the future and what ratepayers can be expected to pay.

"Energy bills will be going up either way," Lembke said. "Let's give a little more certainty to what our constituents and the consumers can expect. I still want to see proper PSC oversight.

"Ameren has fiduciary responsibilities to its shareholders, and it wants to do what is best for its shareholders and what is best for consumers. It's very risky for the them to what they are doing, building a nuclear plant."

Asked whether a prohibition on CWIP that was approved by the people originally should be subject again to a popular vote, instead of being decided in the Legislature, Lembke replied:

"The will of the people is never static. Compared with something that was done in 1976, in reaction to the nuclear scare at the time, we're in a different day. Nuclear has proven to be very safe and very affordable, once it's online."

More changes are coming

Backers of the legislation admit that more debate and more changes are coming. But Scott, the senator who originally submitted the bill, thinks the alterations could make it acceptable to enough lawmakers that it will win approval in both chambers.

Still, he acknowledges the obstacles ahead, and he also realizes that even if Gov. Jay Nixon does sign the bill -- a big if, given the lukewarm if somewhat cryptic statements coming out of his office so far -- the issue will be far from settled.

"I don't think there is ever a bad reason to oppose a rate increase," Scott said. "It's just like a tax increase. Any reason is good enough, whether it's legitimate or not. But if we want clean, carbon-free energy in the future, we need to expand nuclear energy. I think the same battle would be here in boom times as in bust times."

As for what Nixon might do, Scott said: "I would hope he would find it acceptable. It's certainly more consumer friendly than it was when I filed it. But he's the governor."

Asked about the narrow margin by which the bill escaped committee, Scott's reply was terse: "You've got to look at who is on the committee."

One of those members is Griesheimer, who is taking the long view that while something similar to the Ameren-backed bill may eventually pass, action may not come this year. In the meantime, he said, there is a learning curve to catch up to.

"Those who are not on the committee need to be educated about the bill," he said, explaining why he wanted it to go to the full Senate. "It is a highly complex issue. It's hard to understand, I can tell you that, and I've been dealing with these issues for 17 years in the Legislature."

If and when a bill does pass, Griesheimer would like to see it far simpler than what is being considered now.

"If we are going to do nuclear," he said, "let's do nuclear and not throw all that other stuff in there. That's another thing that gave me heartburn."

And he'd also like to see the debate conducted in an atmosphere that is calmer than what prevailed before the ad campaign for and against the bill inflamed the public and jammed Senate phone lines.

"Every time I see a commercial saying rates are going up 40 percent," he said during committee debate, "I just want to throw my shoe through the TV."

Dueling TV spots

The ad that made Griesheimer and others so upset aired during Mizzou's appearance in the Elite Eight of the NCAA basketball tournament -- a prime TV slot that Ameren tried to block in court. But a judge said the ad could air.

It was put together by a group new to the CWIP debate known as the Fair Electricity Rate Action Fund. It identifies itself as a customer-oriented association whose purpose is "to preserve crucial consumer protections which shield Missouri's consumers and ratepayers from unfair utility rate increases."

Its mantra, as repeated in an interview with spokesman Gregg Keller, is that passage of the CWIP legislation will lead to a 40 percent increase in Ameren rates. He said the utility's stance in the debate has not pleased a lot of ratepayers.

"Ameren's approach has offended the sensibilities of a lot of Missourians," Keller said. "As Ameren has continued to hike rates for Missourians, you have seen them more out there the more public the issue becomes. Missourians are squarely on our side."

The group's ad asked people to voice their opposition by calling their senators -- a plea that Lembke said brought 500 calls to his office, asking him to vote no. Other senators were similarly bombarded.

Keller's group clearly identifies as one of its members Noranda Aluminum of New Madrid, which is AmerenUE's largest customer. As such, its rates are lower than what homeowners pay, so the utility portrays its being part of a consumer coalition as misleading or worse.

To counter the anti-CWIP ads, Ameren began airing its own ad, featuring longtime TV anchorwoman Foss, who is now an Ameren vice president for public relations,

In the ad, Foss said the utility's customers "understand and deserve straight talk." Unfortunately, she adds, that is not what opponents are providing.

Filmed in a cozy kitchen, she says that the truth is that if the bill were to pass, instead of a 40 percent increase looming immediately, Ameren customers would have a rate hike of 1-3 percent that would go into effect years from now.

In another ad, Foss says the opposition's campaign is financed by large industrial customers whose rates are already less than what homeowners pay. "Are they really looking out for you?" she asks.

In both ads, Foss uses the tagline: "We listen. We respond. We deliver." What will be the next response in the CWIP wars? Stay tuned. 

Dale Singer began his career in professional journalism in 1969 by talking his way into a summer vacation replacement job at the now-defunct United Press International bureau in St. Louis; he later joined UPI full-time in 1972. Eight years later, he moved to the Post-Dispatch, where for the next 28-plus years he was a business reporter and editor, a Metro reporter specializing in education, assistant editor of the Editorial Page for 10 years and finally news editor of the newspaper's website. In September of 2008, he joined the staff of the Beacon, where he reported primarily on education. In addition to practicing journalism, Dale has been an adjunct professor at University College at Washington U. He and his wife live in west St. Louis County with their spoiled Bichon, Teddy. They have two adult daughters, who have followed them into the word business as a communications manager and a website editor, and three grandchildren. Dale reported for St. Louis Public Radio from 2013 to 2016.

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