Proposition 11 And Union Electric Case Study And Recommendations

2499 words - 10 pages

The Proposition 11 ballot is just twelve days away and actions need to be taken to prevent this measure from passing. This ballot measure would "prohibit nuclear power facilities unless the Federal Government provides adequate means for waste disposal" (Badaracco, 1981: 1). Throughout the following memo I will identify the problems we at Union Electric are currently facing. I will then make a set of recommendations for action against Proposition 11, and finally conclude with some implementation steps for the solutions that have been recommended.
Proposition 11: Closing Callaway
A PEST analysis has been performed on the current situation facing Union Electric. In the following section, I will focus on the most important problems identified in the PEST analysis for which we must find solutions. Please refer to Exhibit 1 for details on the PEST analysis and additional information on other issues we are facing and forces that might help us defeat this ballot measure.
Politically, the onus of our problems is the impending vote on Proposition 11. This is a ballot measure that, as stated above, would essentially shutdown the Callaway power plant. The anti nuclear sentiment in Missouri has already caused a delay and cost increase in the building of this new plant. This delay was caused when Proposition One was passed in 1976, despite our efforts to campaign against it. This measure prevented electric companies from including costs invested in building new facilities in their current rates until the new plant was in operation. Proposition One has already taken its toll on the nuclear power industry, the most important problem we must focus on here is defeating the new Proposition to be voted on in 12 days.
Economically, we are faced with a tremendous loss of funds that have been invested in the Callaway plant if Proposition 11 is passed and the plant faces a shutdown. We have currently invested over 2 billion dollars in building the plant and in campaigning against measures that would prevent the plant from being built. These costs cannot be recovered and would be a tremendous blow to Union Electric. Please see Exhibit 2 for more details on the economics of this situation. Additionally, due to Proposition One, Union Electric and its shareholders have to bear 100% of the cost of construction of the Callaway plant, which is placing a huge burden on the company.
Socially, Missouri residents have a significant anti nuclear sentiment, "where 47% of the population opposes building more nuclear power plants, compared to only 29% nationally" (Badaracco, 1981: 7). Due to this sentiment, we can expect a large supporting force behind Proposition 11. According to the most recent poll taken by the St. Louis Post-Dispatch, 54% of those polled said they were in favor of the Proposition 11 measure, only 30% opposed it, and 16% said they didn't know. In order to defeat Proposition 11, Union Electric needs to gain support from some of those people who currently are in...

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