Ask your city council to withdraw from the UAMPS-NuScale project before it’s too late
Over the last couple of years, several Utah cities have made the right decision and withdrawn from the UAMPS Small Modular Nuclear Reactor (SMR) program. Many Utah cities remain in the program including Brigham City, Hurricane, Washington, Hyrum and Payson.
The UAMPS project will lock remaining municipalities in Utah and several in surrounding states for a share of billions of dollars in costs and unclear risk in the pursuit of a cluster of small modular reactors (SMRs). The project has repeatedly delayed timelines and increased costs associated with its SMRs.
In 2008, NuScale explained: “With timely application for a combined construction and operating license (COL), a NuScale plant could be producing electricity by 2015-16.” In 2019, UAMPS publicly announced that the NuScale nuclear power plant would begin construction in 2023, “with the first 60 MW module becoming operational in 2026 [and] other modules would come on-line soon thereafter.” However, during a July 2019 meeting, it was announced for the first time that completion is now projected for June 2030, and the first module is not expected to become operational until June 2029.
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 two phases of $658.4 million and then $4.7 billion that could leave ratepayers and possibly even taxpayers of these municipalities holding the bag. Costs might have changed recently , however, with UAMPS unwilling to share any information it is difficult to know if the $658.4 million and $4.7 billion figures are still accurate.
Subscription levels to the project have been a key indicator of the projects’ appeal and potential success or failure. The stagnant level of subscriptions is a clear indication of why the project’s risks are too high and why cities should withdraw.
With less interest in the project than anticipated, UAMPS and NuScale have cut back on its size, and costs have risen. When the project was first announced way back in 2015 for $3.1 billion, its capital cost per megawatt of power was $5 million/megawatt. Now, in 2022, the latest from UAMPS is that the total costs of the smaller project are $5.3 billion, which is $11 million/megawatt – more than twice as much.
Will the cost hikes continue? It’s almost a certainty, given the track record of most nuclear projects. Plant Vogtle in Georgia is now topping $30 billion after initial projections of $14 billion. For the experimental and complex NuScale plant, “it is reasonable to expect that the actual construction cost could easily be far more than 50% higher than NuScale’s current estimate,” according to a February report by the Institute for Energy Economics and Financial Analysis (IEEFA).
According to IEEFA’s analysis of one of the city contracts…
- Cities are required to pay whatever the actual costs of the project end up being, even if they go up from the promotional price being communicated now – unless the project is canceled or cities withdraw before construction begins.
- Once construction starts, it’s really hard for a city to withdraw from the project – city leaders would have to find another buyer to take their place, and who’s going to do that if prices are increasing?
The wise path for Utah municipalities is to protect residents from the cost risk and withdraw from the UAMPS-NuScale nuclear project when the “off-ramp” opportunity comes up this year – before anyone gets stuck paying any more. Let private capital take the risk for the new nuclear plant – not local residents and taxpayers.
Contact your city council:
- Brigham City City Council
- Hurricane City Council
- Hyrum City Council
- Washington City Council
- Payson City Council
Important note: The Utah Taxpayers Association has no position on nuclear energy. The Association’s interest in this matter is limited to the extent to which ratepayers/taxpayers could be saddled with massive cost increases and continued delays.