The City Council of Lehi, Utah, one of the largest subscribers to the Utah Association of Municipal Power Systems (UAMPS) Small Modular Reactor project, voted unanimously to withdraw from the project on August 25th. Lehi joins Logan, who withdrew earlier in the month, as the second major city to do so. 

Utah cities have until September 30th to withdraw from the project. Otherwise, the next phase of the project begins and cities that do not actively withdraw are automatically committed to further financial obligations. 

Cities that have subscribed to this project have sunk approximately $9 million dollars into it so far. According to the agreement they entered into when the project began, they have to affirmatively vote to withdraw from the project at several “off-ramps” or they are contractually obligated to continue on. 

This plan, based on evidence and calculations done by your Taxpayers Association, provides a bleak picture of the massive high-risk financial commitments these cities will need to make long into the future. The proposal carries the likely potential for delays and enormous cost overruns on unproven technology that continues to be less and less cost competitive than other clean energy alternatives. 

The Utah Taxpayers Association commends the city council members of Logan and Lehi for making the right choice for their ratepayers and taxpayers. Many of our concerns were reflected in the discussions at both meetings.

Municipal power companies should not be taking the financial risk that is built into this project by essentially acting as venture capital investors bearing the risk of cost overruns and delays. The potential risks far outweigh the benefits. If Small Modular Reactor power produced carbon free power at a competitive cost in the future, private industry would bear the risk to develop it.  Municipal power companies could instead look to purchase power from such a project upon its completion without acting as a seed investor.

The best case scenario for participating cities is that they someday (after 2029) get market rate power. The worst case scenario is a commitment at the next three phases of $19.9 million, $658.4 and then $4.7 billion that could leave ratepayers and possibly even taxpayers of these municipalities holding the bag.

Subscription levels to the project have been a key indicator of the projects’ appeal and potential success or failure. The stagnant level of subscriptions at only 30% – where it has remained for quite some time – is a clear indication of why the project’s risks are too high and why cities should withdraw. With the exit of Logan and Lehi that subscription level is now even much lower.

The remaining cities have until a recently extended September 30th deadline to withdraw. The Utah Taxpayers Association strongly urges city councils to end their financial obligations to this project and for the citizens in these cities to advocate for withdrawal. 

The Utah Taxpayers Association continues to seek clarifications from UAMPS leadership about this project, but the delayed responses we have received have not changed the Association’s opposition to cities’ participation in this project. 

We urge city councils in the municipalities in Utah that are subscribed to the project to vote in a public meeting before the September 30, 2020 deadline to withdraw from the project. We would also urge taxpayers in those cities to contact their city council and urge them to vote to withdraw. 

Your Taxpayers Association held a press conference on August 4, 2020 where Association Vice President Rusty Cannon detailing our concerns to cities’ participation in this project. You can listen to the entire conference by clicking here

The Utah Taxpayers Association has no position on nuclear power. The Association’s concerns revolve around the history of financial failures of similar power projects and the financial risk to ratepayers and taxpayers. 

To get involved, click here.

Note – the 27 municipalities are: 

Beaver, Blanding, Bountiful, Brigham City, Enterprise, Ephraim, Fairview, Fillmore, Heber, Holden, Hurricane, Hyrum, Kanosh, Kaysville, Lehi, Logan, Monroe, Morgan, Mt. Pleasant, Murray, Oak City, Paragonah, Parowan, Payson, Santa Clara, Spring City and Washington.