If one suspected that MidAmerican Energy would be in a position to produce its mandated two year study on nuclear power in Iowa early, what was not expected was that the Senate and House would rush to get bills out of the respective commerce committees before this year's funnel. (See Friday's post on this topic).

Iowans and some legislators don't know enough about the impacts of the bills to make a reasonable decision on them. If a nuclear power generating station is approved by the Nuclear Regulatory Commission, a process that may take years, then construction that will create jobs is unlikely to begin for years after that. Taking time to get all of the facts about the financial impact on rate payers is important, doesn't delay jobs substantially and is just plain common sense.

A question was asked at a public forum last Saturday, “what would such a bill do to electricity rates?” Senator Joe Bolkcom (D-39) responded that they would probably double. The truth is that we don't know how much impact the proposed law would have on rates until the study is published and there has been time to vet it thoroughly. There is no sense amending HSB 124 and SSB 1144 until we know what is in the MidAmerican study. A reasonable legislator would kill the bills in committee and wait until the report is ready and facts about costs known.

The public has a right to read the MidAmerican study and discuss it, as they are bearing the cost for producing it. We don't have the report, but we do know some things that merit conversation now.

Whether a person is or is not in favor of nuclear power generation in Iowa, there are some basic things we need to know. HSB 124 and SSB 1144 are called Construction Work in Progress bills (CWIP) that would allow Iowa public utilities to charge ratepayers higher rates now to cover potential future costs of a yet to be constructed nuclear reactor, even if such a reactor is never built.

Rate payers always pay for construction of new electricity generation technology. A traditional, non-nuclear power plant is financed so that the utility cannot charge rate payers for the capital expense until it starts producing electricity. Because nuclear power generating stations have tremendous financial risk and are very expensive, no new nuclear power generating station has been built in the US in 30 years. Public utilities, including MidAmerican Energy have found the financial risks of getting nuclear power on line are not justifiable.

This is where the House and Senate study bills would address the financial risk. The potential law would shift the financial risk from the utility to rate payers, so the utility could proceed with construction. If Iowans want nuclear power, we may have to pass a CWIP. If it is too expensive for Warren Buffet's MidAmerican Energy, why should Iowa farmers and town folk be able to afford it?

The State of Georgia may build the first new nuclear plant in 30 years and adopted a CWIP. Iowa legislators should study the impact the Georgia CWIP has on ratepayers. Other CWIPs were passed in South Carolina and Florida and they should also be studied. People familiar with the Georgia CWIP say Iowa's proposed legislation shifts more risk to customers than does Georgia. There are other things to consider regarding CWIPs before the legislature passes one.

It boils down to this. If MidAmerican Energy builds a nuclear power generating station, for each billion dollars in costs, on average, $1,597 will be passed along to each of MidAmerican's 626,223 Iowa retail customers. Are Iowa households ready for this? Are Iowa households ready to foot the bill knowing that a nuclear power generating station may never be built?

Perhaps this is all a case of funnel madness. Iowa legislators should take a deep breath and get all the facts about CWIP before rushing to a judgment they will surely regret. If it means waiting until the 2012 session to make a sound decision, then that is what should be done for Iowans.