Resource

Iowa Utility Board Comments on Iowa's Nuclear CWIP Bill

Department of Commerce: Utilities Division
Last updated: 1/18/2012

The Board believes that a diverse fleet of generating resources can be a
desirable asset for an electric public utility.  Prudent planning for these long term investments should involve consideration of all reasonable alternatives.  It appears that current and future developments may make carbon-emitting generating resources uneconomical and, as a result, make nuclear power plants a more viable alternative for serving customer needs than they have been in the last few decades. However, it may be that additional regulatory certainty is required to create a level playing field for all of the reasonable alternatives.
 
House File 561 relates to the permitting, licensing, construction and operation of potential new nuclear-fueled electric generation facilities in Iowa.  It also affects the way that customers would pay for those facilities by shifting the allocation of risk between the utility and its customers.  It is staff’s understanding that companies looking to invest in nuclear energy argue that it would be difficult, if not impossible, to finance one or more new nuclear plants without a greater level of assurance of cost recovery than is provided by traditional public utility regulation.  However, the precise extent of the required risk-shifting may be difficult to determine. 

In this memo, staff outlines some potential barriers to the efficient implementation of HF 561 and describes possible methods to address them.  While many of these issues were raised earlier in 2011, the importance was
recently heightened by conversation and meetings with staff from the Nuclear Regulatory Commission and the US Department of Energy. 
 
Board staff also identifies sections of the bill that may be subject to multiple interpretations, such that clarification may be helpful.  Finally, the memo identifies a few policy considerations that may be worthy of further discussion.

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