Ameren Corporation (Ameren) is suspending plans to construct a new nuclear plant in Missouri due to legislation which would prevent the company from recovering costs. The Missouri law prevents utilities from increasing electric rates to pay for new power plants until the plants are operational. The company had planned to construct a 1,600 megawatt second reactor at its Callaway nuclear plant in central Missouri. The plant provides power to Saint Louis and surrounding areas.
As the construction of the nuclear plants costs billions of dollars, financing to such projects is difficult unless utilities can recover costs ahead of time.
The bill in Missouri legislature would have provided a mechanism for such cost recovery, but the new version of the legislation strips the legislation of the very provisions we needed most to move forward, said Thomas Voss, chief executive of Ameren utility AmerenUE, in a prepared statement.
Voss said, A large plant would be difficult to finance under the best of conditions, but in today’s credit constrained markets, without supportive state energy policies, we believe getting financial backing for these projects is impossible.
Ameren had projected the price of the new reactor to be at least $6 billion. The company had formed a partnership with UniStar Nuclear, a joint venture between Constellation Energy Group Inc. and Electricite de France SA. to construct the Areva S.A. evolutionary power reactor.
Ameren said that the energy demand has grown 50% in Missouri since 1990 and is estimated to grow significantly over the next 50 years.