McCaskill says utility customers should help pay for energy projects | St. Louis Public Radio

McCaskill says utility customers should help pay for energy projects

Jan 10, 2012

This article first appeared in the St. Louis Beacon, Jan. 10, 2012 - U.S. Sen. Claire McCaskill made a rare foray into Missouri state issues Monday when she said that she supports doing away with the state's 35-year-old law that bars utilities from raising customers' rates to pay for the construction of new facilities before they are in operation.

The senator, D-Mo., said in an interview that the law is "holding back energy choices for Missourians because it makes it impossible for utility companies to make the investments they need to make to keep energy cheap for the long haul."

Forcing utilities to fund projects fully without any money from customers is "a very difficult business model for utilities to embrace,'' she said.

McCaskill's stance is likely to put her at odds with environmental activists in the state who have opposed efforts by Ameren to persuade the General Assembly to eliminate the law as part of its proposal to construction a new nuclear plant, commonly called Callaway II.

Gov. Jay Nixon, also a Democrat, supports the nuclear plant but has been circumspect when it comes to the 1976 law, commonly known as a ban on CWIP (construction work in progress) rate hikes.

McCaskill's comments came after she had been joined by Ameren chief executive Dan Cole and more than a dozen other utility and energy executives and scientists at an hour-long roundtable on energy held at Washington University. Chancellor Mark Wrighton also participated.

McCaskill, who had sought the forum and kicked off the discussion, said her aim was "to leave here smarter than I came."

Is U.S. Ceding Energy Edge to China?

Doug Yaeger, chief executive of Laclede Gas, made reference to CWIP when he said that such a ban discouraged utilities from findubg new energy sources. Ameren's Cole said the electrical utility had cut back on energy conservation and its quest for the nuclear plant in the wake of legislative opposition in Jefferson City.

But most of the roundtable's discussion dealt with concerns that the United States was in danger of ceding its role as a leader in energy conservation to China and India, in the wake of pressures in Washington to do away with federal grants for research into new sources of energy and conservation.

Deck Slone, vice president of Arch Coal, said there was a way for the federal government to offer constructive aid for early research and development "without a big cost."

Slone observed that China has quadrupled its use of coal since 2000, which globally can have a serious impact on climate change and global warming, negating some of the environmental efforts in other countries, including the United States.

Laclede Gas' Yaeger was among several speakers who said that the U.S. has been hurt by the public's tendency to flit from one popular new-energy idea to another.

As several put it: Nuclear power is in, then it's out. Solar is in, then out. The same for corn-based ethanol, biofuels and -- most recently -- natural gas.

"The issue is, we have too many solutions,'' Yaeger said, adding that the nation often has lacked focus.

McCaskill asked, for example, why natural gas, a domestic source now in generous supply, isn't used more to power automobiles.

Yaeger replied that many institutions, such as Lambert-St. Louis International Airport, do use some older vehicles and shuttles that operate on natural gas. He said that automakers had dropped production of vehicles fueled by natural gas for largely market reasons -- even though "we're swimming in the stuff."

McCaskill observed that perhaps, as a member of the Senate Armed Services Committee, she should seek a requirement that the U.S. military use vehicles fueled by natural gas on domestic bases.

Yaeger also prompted a chuckle from the senator when, during a discussion on "fracking'' -- a procedure used to obtain more gas and oil by using fluid to fracture rocks -- the Laclede Gas executive blamed the controversy surrounding the practice to its use by "fly-by-nighters'' who don't know what they're doing.

"There is an opportunity for (federal) regulation,'' said Yaeger, with emphasis. McCaskill asked, with a smile -- but with equal emphasis -- if some in the room were recording Yaeger's pro-government comments.

McCaskill reaffirmed later that she believed that Missouri needs, and would like, to shift away from its heavy reliance on coal. "Coal emits CO2 (carbon dioxide) and is bad for the environment,'' she said. But coal remains attractive because it is affordable. What the energy industry needs to do, she said, is focus on "what can we do with coal to make it cleaner, to make it better?"

The forum is among several on energy that McCaskill is holding this month before the Senate reconvenes. Although focused primarily on issues, the roundtable wasn't devoid of politics.

McCaskill, who is seeking re-election this fall, observed that some of her Republican opponents -- whom she did not identify by name -- want to eliminate all federal involvement in energy efforts and to end grants to institutions like Washington University that undertake such research.

"There are some candidates who want to wipe the Department of Education and the Department of Energy off the map,'' McCaskill said. "That's frightening."

McCaskill said that Republicans pressing for no federal involvement in alternative energy research or improvements need to recognize that they saying, in effect, that they want "China and India to be completely in charge."

Cap and Trade Implied, but Not Mentioned

The roundtable did not feature any direct discussion about cap-and-trade, a policy -- initially backed by both political parties but now eschewed by many on both sides -- that calls for capping harmful emissions but allows companies to trade their "caps'' with  companies that have fewer emissions.

Backers say the policy is a market-based system to battle pollution, while some critics say the approach could lead to higher energy costs.

A bill authorizing such an approach narrowly passed the U.S. House in 2009 but died in the Senate. McCaskill said at the time that she did not support that particular cap-and-trade bill because its provisions would hurt Missouri.

McCaskill's critics -- including the Missouri Republican Party and the conservative American Crossroads political action committee -- are seeking to make the matter a campaign issue. They contend that she has supported cap-and-trade in the past and has been misleading the public about her record.

McCaskill said Monday that her opponents are referring to a procedural vote she cast in June 2008 in favor of Senate debate on a cap-and-trade proposal. McCaskill emphasized, however, that she co-signed a letter the same day in which she and nine other senators laid out their concerns about the bill in question. Her staff provided a copy of the letter to the Beacon.

McCaskill said that she only voted to allow debate on the cap-and-trade bill. "I didn't vote for it,'' she said.

McCaskill observed that her Republican critics may have forgotten that environmental groups have run "$500,000 in ads'' blasting her for not supporting the cap-and-trade bills.

Her stance on CWIP may generate more such spots.