Berkshire Hathaway Inc's MidAmerican Energy Co has decided against building any new nuclear reactors in Iowa in the near future because of regulatory hurdles.
"It is premature, given the uncertainty of carbon regulation and the extensive regulatory review for new nuclear reactor designs, to immediately pursue any additional site work on a future generation option, including a nuclear facility," the company said in a statement on Tuesday.
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Many utilities have put plans for costly new nuclear reactors on hold due to cheap natural gas prices, the much lower cost to build gas-fired generators, and the lack of federal restrictions on carbon emissions.
A few companies however have forged ahead with construction of five new reactors - Southern Co in Georgia, Scana Corp in South Carolina and the Tennessee Valley Authority in Tennessee.
MidAmerican's news came after the company completed a study on nuclear feasibility and reported the results to Iowa regulators on Monday. The utility, the state's largest, had been collecting a half-percent charge from customers there to study the feasibility of building new reactors.
MidAmerican asked the Iowa Utilities Board to approve a plan that allows the company to refund $8.8 million of the funds collected from its customers in the state and to stop collecting the half-percent charge for the assessment, effective July 1, three months earlier than planned.
The refund and elimination of the half-percent charge for the nuclear assessment will result in a slight decrease in Iowa customers' bill amounts starting this summer, MidAmerican said.
In 2010, MidAmerican worked with state regulators to enact a law that authorized the assessment of nuclear generation potential in Iowa.
The assessment began in 2010. Since that time, MidAmerican identified various sites that met nuclear regulatory requirements throughout the state and eventually narrowed the locations to two for additional testing.
In fall 2012, soil and environmental assessments were taken in Fremont and Muscatine counties to assess land suitability in the event a determination was made to develop a facility.
Based on the assessment's results, MidAmerican said it would not buy any land in Iowa at this time to develop a nuclear facility. The land options in Fremont County will expire, and the company said it would not pursue an extension on its land options in Muscatine County.
MidAmerican said it would still assess and review all sources of generation.
Separately, MidAmerican said its recently announced plan to build additional wind generation would help keep customers' costs down. If approved by state regulators, the wind expansion will reduce customer rates by $10 million a year by 2017, starting with a $3.3 million decrease in 2015.
MidAmerican provides electric service to 734,000 customers and natural gas service to 714,000 in Iowa, Illinois, Nebraska and South Dakota.
(Reporting by Scott DiSavino and Joe Silha in New York; Editing by Lisa Von Ahn)