Ameren scraps plans for new Missouri nuke

Dive Brief:

Ameren has canceled plans to develop a second nuclear unit at its Callaway Energy Center, citing long-term capacity needs, falling costs of alternative generation and the regulatory climate in Missouri.
But the company said it remains committed to nuclear generation as a carbon-free source, pointing to the 20-year license extension it received last year for the 1,190-MW Callaway unit already in operation.
Ameren made the announcement in its second quarter earnings release, where showed non-GAAP net income of $141 million for the quarter, not including a loss charge taken on the Callaway decision.

Dive Insight:

After seven years of development, Ameren has scrapped plans for the second unit at Callaway Energy Center.

“We continue to believe nuclear power must be an important clean energy source for our company and country,” Chairman, President and CEO Warner Baxter said during the company's earnings call with analysts. The decision was “driven by recent changes in vendor support for licensing efforts at the Nuclear Regulatory Commission, our assessment of long-term capacity needs, declining cost of alternative generation technologies and the regulatory framework in Missouri,” he said.

The decision, according to Platts, shows the hurdles the nuclear industry faces as the growth of renewables continues. Within the next 20 years Ameren intends to reduce its coal reliance by about a third while adding 500 MW of generation, mostly wind.

Ameren's second quarter net income of $141 million was lower than the $150 million recorded in the same period last year. The company pointed to lower retail electric sales, driven primarily by milder early summer temperatures in 2015.

The earnings comparison was also “negatively affected by a seasonal rate redesign and the timing of revenues under formula ratemaking related to Ameren Illinois electric delivery, as well as higher depreciation and amortization expenses,” the company said. Increased investments in electric transmission and delivery infrastructure and a lower effective income tax rate helped offset those losses.