Author: Paul Deaton

Prepared remarks delivered by Paul Deaton at the Iowa City Public Library on the 68th Anniversary of Hiroshima, Aug. 6, 2013.

Thank you Maureen McCue for the kind introduction. I want to recognize some of our colleagues in this work who are in the audience tonight.

Well we held back new nuclear power in Iowa. Isn’t that great?

In February 2010, I wrote the first of a long series of posts on Blog for Iowa about what I believed to be the legislature’s infatuation with nuclear power during the last four sessions of the Iowa General Assembly. I wrote, “I heard the words ‘zero sum gain’ applied to MidAmerican Energy’s process toward change for the first time. It seems to fit. A zero sum gain is a situation in which a participant’s gain or loss is exactly balanced by the losses or gains of the other participant(s). If the state wants to move forward with nuclear power, it’s okay with MidAmerican Energy, but they are a business, so the customers will have to pay.”

The customers will have to pay. That pretty much sums it up. What’s missing is no one knew how much a new nuclear power plant would cost, then, or now. For this and other reasons, the people of Iowa decided there were better ways to generate electricity.

During this presentation I want to talk about what the nuclear power discussion was, and what it meant.

At the beginning, the legislation seemed on a stealth track toward passage without opposition. Physicians for Social Responsibility joined with an extensive and diverse coalition who found common ground in opposing nuclear power in Iowa. By the end of our work, according to public polling, a vast majority of Iowans opposed new nuclear power and some legislators who had supported House File 2399, the nuclear power study bill, and House File 561, the nuclear power financial bill, had changed their minds.

What I want to cover in my remaining time is three things: the campaign to stop the nuclear power study, the campaign to stop the nuclear power finance bill, and then some general remarks.

Before beginning, I want to set the framework in which the nuclear power discussions occurred.

The electric utilities in Iowa are looking at a 50-year horizon that compares where we are now with regard to electricity generation, to where we will be. Electricity generation is currently a mix of nuclear, coal, natural gas, wind and hydroelectric. The nuclear and coal plants are making their exit at the end of their life cycle, so the question is what is next?

After defeating two of three proposed coal fired power plants in the state, combined with our recent success in holding back nuclear, we seem bound to keep hydro the same, generate more wind and solar electricity, use no new nuclear or coal plants if we can manage it, with natural gas as the flexibility in the system to meet so-called baseload electricity needs.

Demand growth for electricity is slowing to less than one percent per year, so the primary issue is capital investment to replace depreciated generating capacity. Pretty tedious stuff for the environmentalists among us, but where Warren Buffett and others like him invest their billions is a real issue for us, with real world impacts on the environment.

When we talk about these big picture solutions, however, the missing piece of the puzzle is distributed generation. That is, how individual homes and businesses might produce their own electricity on-site, and sell excess capacity back into the electrical grid.

As prices come down for wind and solar, distributed generation becomes more viable, and could tilt what the regulated utilities do. The thing is, how long can we wait to take CO2 emissions out of the mix? The inconvenient truth is that we can’t wait.

Another thing to note is that while burning natural gas produces about half the CO2 emissions compared to burning coal, the gain for the environment is mitigated by methane leakage along the pathway from extracting the gas to delivery at the power plant where it is burned. Like with any energy source, burning natural gas should be considered in the context of its entire lifecycle. In that context, its greenhouse gas emissions are not much better than coal, if not worse, depending upon the amount of methane leakage.

From the preamble of House File 2399:

“It is the intent of the general assembly to require certain rate regulated public utilities to undertake analyses of and preparations for the possible construction of nuclear generating facilities in this state that would be beneficial in a carbon constrained environment.” There is a lot to unpack there, and the bill had additional aspects I have eliminated to save time. Suffice it to say House File 2399 passed both chambers of the legislature, and on April 28, 2010, Governor Chet Culver held a signing ceremony for what he called the “Nuclear Energy Jobs Creation Bill.” In a letter that is available on Blog for Iowa, Culver wrote, “this bill gives Iowa utilities and consumers more tools to make decisions on our energy future. The study will give us a clear idea of what the future for nuclear and alternative energies may hold in Iowa.” On June 4, 2013, MidAmerican Energy announced the study was complete, and they would be refunding a portion of the $14.2 million dollars collected for the study from rate payers, beginning this month. There was no mention of the words wind, solar or alternative energy in the 50 page final report from MidAmerican Energy to the Iowa Utilities Board. Governor Culver was wrong about the study’s purpose, as he was about many things.

Now let me talk about House File 561, the nuclear power finance bill.

On Monday, March 28, 2011, Wally Taylor, counsel to the Iowa Chapter of the Sierra Club presented an analysis of the Contruction Work in Progress or CWIP bill that eventually became House File 561. Iowa’s version of CWIP was much worse than those passed in other states in that its main purpose was to codify specific costs that rate payers would pay, up front, should the electric utility decide to apply for and construct a nuclear power plant. It included every cost the industry could envision. Among them, it defined “prudent costs” for the Iowa Utilities Board (IUB), when what would have actually been prudent was leaving costs to the board members discretion, rather than being directed by the legislature. It instructed the IUB on calculation of allowed debt and return on equity, something that should also have been left to the discretion of the IUB after performing due diligence on a proposed project. The bill also exempted nuclear power from the requirement, applicable to all other electric generation plants, that the utility has considered other sources for long-term electric supply and that the proposed plant is reasonable when compared to other feasible alternative sources of supply. There were other considerations, and in the end the legislation, if passed, would be biased to favor nuclear power over other methods of electricity generation.

By the close of session, House File 561 failed to gain traction in the Iowa Senate, as most familiar with our campaign are aware.

In closing, let me say something about new nuclear power. In its current state, no privately held company in the United States would take on the risks of nuclear power without significant government and rate payer subsidies. Period. If they would, the Nuclear Regulatory Commission is open for business, and accepting applications.

When we talk about subsidies, first, there is the risk of disasters as happened in Chernobyl and Fukushima. To encourage nuclear power, the U.S. Government created the Price Anderson Act which puts a ceiling on the losses that would be paid by a nuclear power plant owner in the case of a similar disaster. You and I would pick up the excess costs through our taxes.

Second, the Department of Energy owns and is responsible for nuclear fuel throughout its life cycle. While nuclear power utilities charge a small fee per kilowatt hour to help pay for disposal of their nuclear waste, every power plant’s disposal costs are underfunded. This underfunding is complicated by storage that could last for multiple millennia.

Any executive of a public utility, as a matter of personal competence, would want to know how much building a new power plant would cost. In the case of nuclear power, no engineer has a sharp enough pencil today to accurately predict the costs. When MidAmerican Energy CEO Bill Fehrman was asked how much a new nuclear power plant would cost during the last three and a half years, he constantly dodged the question, perhaps because he simply did not know. House File 561 got people like Mr. Fehrman off the hook, by transferring those financial unknowns to rate payers.

When nuclear power came into being in the wake of the Atomic age, whose birth we commemorate today on Hiroshima Day, it was scaled big. In retrospect, if used, nuclear power should have been modeled on the technology of nuclear submarines.

It seems likely the engineering challenges of small modular reactors (SMR) could be met and resolved, as could the issue of nuclear waste disposal. We are not even close to resolving either of those issues.

As MidAmerican Energy wrote in their report, “SMR licensing and SMR pricing could influence the decision to deploy nuclear generation in Iowa,” confirming my point― the technology is not ready for a proposal to the NRC.

We haven’t heard the last about nuclear power. But unlike the time prior to the fight to stop these bills, to stop nuclear power in Iowa, advocates are now ready to take up the fight anew if called upon.

Thank you for your time and attention. We’ll have a question and answer period at the end.

I’ll turn the discussion over to Dr. John Rachow who will speak to the issue of radioactive nuclear fuel. Thanks again.