By September 14, 2020, city and town councils that have committed their municipal power ratepayers to the Utah Association of Municipal Power Systems (UAMPS) Small Modular Nuclear Project (also known as the “Carbon Free Power Project (CFPP) must hold a public vote to withdraw from the project.
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.
Information has been difficult to gather, due to a quirk in Utah’s Open Meetings laws that exempts UAMPS from having to allow the public to observe their meetings. Your Taxpayers Association strongly suggests that city council members remove their taxpayers from the burden of the project, and urge residents to contact their city council in support of the decision to opt-out.
The first indication of why this project is a bad idea is the level of subscriptions (essentially “buy-ins”) that have been gathered. According to a recent presentation on the project in a recent Bountiful City Council meeting, after years of effort, the project is only less than 30% subscribed. In the past year, subscriptions to the project only increased by 1 megawatt (over the current 213 total).
Investor owned utilities have turned down these types of projects for good reason and the low amount of subscriptions shows that, relative to coal, natural gas, solar and wind, small modular nuclear power is just not cost competitive. In addition, we could write pages about the unmitigated financial disasters similar projects have become (Vogtle Project- Jacksonville, FL, Seabrook Project- Seabrook, NH, Virgil Summer Project- Jenkinsville, SC just to name a few) .The UAMPS CFPP project could also lead to massive sunk costs.
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.
These municipalities are currently in an “off-ramp” period that lasts until September 14, 2020.
The next step, which constitutes obtaining approval for the design of the reactors and acquiring a license, is projected to cost UAMPS members approximately $19.9 million more, on top of the amount they’ve already spent.
The various shares of that amount due from each city depends on the amount of power they have subscribed for. For example, Bountiful City has a share of 3.2822%. Their amount for the next phase would be an additional $654,271 (this amount was stated at a July 28, 2020 city council meeting).
Murray City has a share of 6.7286% which, by our calculations, would obligate them to $1,341,273 for the next phase. That is, in Murray’s case, $1.3 million dollars of city funds (regardless of whether these costs are segregated in the electrical enterprise fund (cities move money back and forth from their general fund frequently) that could be used for police, fire, streets or parks, or any other function the city provides.
The risks only become worse from here. This approval section of the first phase is scheduled to take until approximately May of 2023. At that time the project would enter the next phase- licensing, which is projected to last until November 2025. The projected cost for UAMPS members for that phase is an additional $658,412,474 million. Yes, you read that correctly, $658 million. For the two examples of Bountiful and Murray, their shares would be approximately $21,582,400 and $44,301,941 respectively. Your Taxpayers Association doesn’t believe that gambling $1.3 million more in the hope that things look rosy enough in 3 years to commit to another $44 million and then a massive amount more later for a city like Murray makes any sense.
The construction phase of the project that is projected to not start until December of 2025, the amounts get downright staggering. The cost to UAMPS members for that phase is currently at over $4.7 billion. According to documents we have been able to find, the next “off-ramp” commitments collectively for UAMPS members are $19.9 million, $658.4 million and over $4.7 billion.
Committing cities to that much money on a project that is still untested, has not gained approval from the Nuclear Regulatory Commission (NRC) and relies heavily on annual appropriations from the federal government (to the tune of billions of dollars to make the project even approach the point of making any financial sense) is the wrong move and could put ratepayers and taxpayers on the hook for massive sunk costs for decades to come. The money spent on the project so far pales in comparison to what cities would be signing up for next.
We urge city councils in the 27 municipalities in Utah that are subscribed to the project to vote in a public meeting before the September 14, 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. Also speaking against the project was Peter Bradford, former member of the U.S. Nuclear Regulatory Commission whose remarks can be viewed here. You can listen to the entire conference by clicking 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.