PSC Wants to Boost Nuclear

Sep 09 - Advocate; Baton Rouge, La.

The Louisiana Public Service Commission wants to go nuclear to fight rising electric bills.

Four of the five commissioners who regulate electric rates in Louisiana said they want some utility to build a new nuclear plant in Louisiana in the near future.

Commissioner Jay Blossman of Mandeville is going further and wants the commission to show privately owned utilities --- in advance -- how they can recoup their investments. In the past, such repayment blueprints came upon completion of construction, when the bills were paid.

"If we're not proactive in trying to get a new nuclear plant, we'll not get one," Blossman said. "It's the cheapest power we've got available to us."

Blossman asked his colleagues to debate his idea at the PSC's next meeting on Wednesday.

The biggest comfort the PSC can give utility companies and their Wall Street financiers is ensuring they will get back the $4 billion or so needed to build an enriched-uranium power generation, he said.

Blossman wants the PSC's staff and experts to review the various options, such as:

State and federal incentives.

Tax write-offs.

Economic development packages.

Use of future rate reductions and refunds that would have gone to customers.

Ultimately, customers would be asked to pay a large portion of financing a nuclear plant through rate increases.

Blossman said in the long run, because nuclear power is cheaper than power Louisiana customers are using now, rates would go up for five or six years but go down once a nuclear power plant starts operating.

Blossman's colleagues, while not commenting directly on his proposal, back the idea of encouraging construction of a nuclear power plant.

"Nuclear is something the commission needs to be looking at seriously," said Commissioner Dale Sittig of Eunice.

"The scare of nuclear power, the fear, has been somewhat reduced over the years as we have seen that they operate safely," Commissioner Foster Campbell of Bossier City.

PSC Chairman Jimmy Field of Baton Rouge said much of the opposition to the last nuclear plant built in Louisiana - Entergy Corp.'s unit in St. Francisville - has melted away.

He said the schools in West Feliciana Parish are now among the best in the state because of the taxes paid by the Riverbend facility.

"We've learned to live with it, and it benefits the tax base as well," Field said.

Commissioner Lambert Bossiere of New Orleans said he remains undecided on nuclear power plants. "It's worth studying at a time when our energy costs are so extremely high," he said.

The commissioners have been pushing the state's privately owned utilities to use different kinds of fuel to make electricity.

Entergy, for instance, largely relies on the now-expensive natural gas to make electricity in Louisiana. Because of that reliance, Entergy's nearly 1 million Louisiana customers pay some of the highest rates - cents per kilowatt-hour - in the South, according to two groups that track utility prices around the country.

The PSC sets the base rate - the cost of making and distributing electricity plus a profit - but the price of fuel to run the power generators is passed through directly to customers penny for penny. Natural gas has roughly tripled in price over the past five years.

For instance, Entergy's customers in the Baton Rouge area paid 7 cents per kilowatt-hour produced by natural gas on their August bills, said the company's filings with the PSC. But that same month customers paid about a half cent per kilowatt-hour for the same amount of electricity made with nuclear fuel.

Utility companies have not built a nuclear plant since the 1980s, largely because of the costs and fears that mismanagement would lead to Chernobyllike accidents, which required the evacuation of a city in the Ukraine region of the former Soviet Union because of radiation poisoning.

But nuclear plants in the United States have operated safely over the past two decades at low cost while expelling little pollution.

President George W. Bush has pressed the U.S. Congress and federal regulators to provide start-up assistance for new plants and reduced the amount of paperwork necessary.

Since then, the Nuclear Regulatory Commission several times announced in prepared statements that maybe a dozen or two nuclear reactors are on the drawing boards.

Entergy Corp. owns and operates 10 nuclear power plants around the country, said Mike Bowling, a spokesman for Entergy Nuclear, which is headquartered in Jackson, Miss.

Bowler said the company could not comment on any PSC plans until its experts have a chance to review it. But company officials are generally encouraged by efforts to examine the value of a new nuclear facility.

A consortium of power companies, of which Entergy is also a member, last year elected to start the application process for two new nuclear plants near Port Gibson, Miss. and Scottsboro, Ala.

At the same time, Entergy announce that it would begin the process for a new facility at St. Francisville, Bowler said.