By Mark Cooper
Why would anyone pay a $150 for something that costs $100? They wouldn’t if they had a choice, and that’s the problem with new nuclear reactors. Wall Street knows that new reactors cost too much and won’t fund them. But MidAmerican wants to build them, so the company is looking to the Iowa ratepayer to play the fool.
MidAmerican’s 636,000 customers in Iowa are captive customers; they can’t shop for the best power deal. Historically, when a utility wants to add new generating capacity it must build the plant and begin producing electricity before seeking to recover the costs from its customers. They can only recover costs that are reasonable and prudent. And the utility’s rate of return on its investment in the new plant should be commensurate with the risk the utility faces in undertaking the project.
MidAmerican, through HSB 124 and SSB 1144, wants to turn the whole process on its head. As a result, all three of these traditional consumer protections would be dramatically weakened.
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