Warren Buffett’s Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B) subsidiary MidAmerican Energy Company (OTCMKTS:MDPWK) is shelving its plans to build a nuclear plant in Iowa.
MidAmerican Energy Statement:
MidAmerican Energy Company (OTCMKTS:MDPWK) in a statement on Tuesday indicated that with the uncertainty of carbon regulation and extensive regulatory review looming for new nuclear reactor designs, the public utility company has scrapped its plans for Iowa’s second nuclear plant.
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The public utility company however indicated that it would still assess and review all sources of generation.
Iowa State’s largest utility company has been collecting half-percent charge from customers there to offset the feasibility cost study for constructing new reactors.
The public utility company sought approval from Iowa Utilities Board to also refund $8.8 million of the funds collected from Iowa’s customers and would stop collecting the half-percent charge for the feasibility study, effective July 1. This would result in Iowa customers paying a slightly lesser amount, starting this summer.
The public utility company provides electric services to 734,000 customers and natural gas services to 714,000 in Iowa, Illinois, Nebraska and South Dakota.
Several utilities companies have put on hold their plans to build costly new nuclear reactors, thanks to the availability of natural gas at cheaper prices and building gas-fired generators at a much lower cost. Besides lack of federal restrictions on carbon emissions also aided their decision to put on hold to nuclear plants.
Till last year, no new nuclear reactors had been approved in the U.S. since 1978. However a few companies such as Georgia’s The Southern Company (NYSE:N), South Carolina’s SCANA Corporation (NYSE:SCG) and the Tennessee Valley Authority in Tennessee have decided to pursue with their decision to proceed with construction of five new reactors.
MidAmerican Energy Submits Report:
MidAmerican Energy Company (OTCMKTS:MDPWK) has submitted its report to Iowa regulators on Monday, after completing its study on nuclear feasibility.
The public utility company worked with the Iowa regulators to enact a law in 2010 to authorize the assessment of nuclear generation potential in the State. It commenced its assessment in 2010 and narrowed its choice of locations to two for additional testing. During the fall of 2012, MidAmerican Energy Company (OTCMKTS:MDPWK) conducted environmental assessments in Fremont and Muscatine counties to ascertain suitability of land. While Fremont County land option would expire soon, the utility company decided not to pursue an extension for Muscatine County.
In a separate announcement, MidAmerican Energy Company (OTCMKTS:MDPWK) said its recently announced plan to build additional wind generation would help keep customers’ costs down. The public utility company indicated that the wind expansion would reduce customer rates by $10 million a year by 2017, starting with a $3.3 million decrease in 2015, in case the State regulators approve its plan.
H/T Rob Wile of BusinessInsider