After several Utah cities wisely decided to exit the UAMPS Small Modular Nuclear Reactor (SMR) Program two years ago, the remaining cities continued to put their ratepayers and taxpayers at risk while waiting for the next round of updates on the project.
The Utah Taxpayers Association has been urging member cities of the project to withdraw as the project continues to run into delays (the project is now about 10 years late) and cost escalations become frequent. These risks could likely end up on the backs of ratepayers and taxpayers in these cities. Cities should not be acting as venture capitalists and owners of a project that carries such high risks and costs. If the project can be completed, they are better off looking to purchase power once it is online in 2029 – if that date actually holds up.
As 2022 comes to an end, there are now signs that the projected cost of power the project might provide is likely to almost double from previous estimates. In fact, there is a chance that the project fails an upcoming “Economic Competitiveness Test (ECT)” which would cause the project to come to a halt. UAMPS members were given an earlier estimate for the cost of power for the last several years of $58 per megawatt-hour. Based on comments in recent city power meetings for participants, it now appears that the cost could be as high as $100 per megawatt-hour. Additionally, if the recently passed “Inflation Reduction Act” does not provide heavy subsidies for this project, the cost could approach $120 per megawatt-hour.
This result could provide an opportunity for remaining cities in the project to exit as cost estimates are changed again. This “off ramp” could come as soon as early 2023. Unless terms are renegotiated, this could be the last opportunity for an exit and remaining cities could be locked into escalating costs with no chance to withdraw. As history shows, once a nuclear project enters a construction phase, costs can escalate quickly and further delays are common.
With the upcoming news that is likely to be made public in January 2023, now is the time for elected officials in UAMPS cities to sharpen their pencils, carefully review the results of the ECT, exit the project and find another route for their long term power needs. For example, given the rapidly changing pace of technology and innovation, UAMPS could engage in an open and public process collecting bids for long term baseline power from any sources available. This would be far better for the financial future of its member cities and their taxpayers.