With municipalities — including Logan — pulling out of the proposed small modular nuclear reactor project in Idaho, some are wondering if the project is in danger of unraveling.
The project, a partnership between the Utah Associated Municipal Power Systems and the NuScale power company out of Oregon, would build next-generation nuclear reactors at the Idaho National Laboratory in Idaho Falls. Proponents have cited the need to supplement green energy with “baseload” power sources to make sure the lights stay on even when the wind’s not blowing or the sun’s not shining.
Green energy advocates and some local officials, however, have pointed to what they see as red flags with the project, such as multiple cities withdrawing or lowering their agreements and an ever-changing deadline — a theme of the project.
Originally, the deadline to withdraw from the first-of-its-kind, carbon-free project was at the end of September, but with concerns rising, Hyrum Power Superintendent Matt Draper said that deadline will be pushed back to an undetermined time to give UAMPS’s members — like Hyrum — a chance to reevaluate their involvement.
“We’re just looking at reallocating and doing different things, and not spending too much money to try to make the project work still,” said Draper, who is also a UAMPS board member. “We have a cutoff, we have a dollar-amount that we’re looking at … and so $55 a megawatt (-hour) is our price.”
But according to Peter Bradford, “that guaranteed 5.5 or 6.5 cent per kilowatt-hour ceiling (in the project’s proposal) really isn’t a firm ceiling.”
“It looks good, but it’s not truly a firm price,” said the former member of the U.S. Nuclear Regulatory Commission. “It doesn’t, for example, make clear who will bear the costs if there are cost overruns, in order to assure that they don’t fall on the UAMPS members or taxpayers.”
Bradford, who wrote to the Utah Taxpayers Association in August against the project, said these problems are common when a coalition tries to negotiate nuclear energy contracts.
“They just didn’t have the expertise to do the analysis that they really needed on the economic risks of what they were getting into,” he said.
Bradford added every nuclear project since the 1970s has had cost overruns, and the multitude fail, ultimately burdening rate- and taxpayers, and sometimes bankrupting municipalities.
This is what the Utah Taxpayers Association is afraid will happen with the UAMPS project, according to Vice-Chair Rusty Cannon.
“We think it’s just too steep, too great of a risk,” he said. “They should not be acting as essentially seed investors in venture capital projects, essentially, that should be borne by private companies, not by city-owned power companies that are funded by taxpayers.”
This was also the stance Logan Mayor Holly Daines had taken since the project was announced.
Concerns like the rising budget and being in the highest-risk category of planning led Logan’s Light and Power Director Mark Montgomery to recommend the Municipal Council to withdraw from the project for these same concerns in August — nearly a month before the initial “off-ramp” deadlines designed to let municipalities back out of the project without losing money.
“I’ve been against this since day one,” added Rich Anderson, the finance director for Logan, at the Aug. 18 council meeting. “I’ve never thought any of it has made the slightest bit of sense. And the more I listened to the people who are in charge, the less confidence I have in it.”
Draper previously told The Herald Journal every new energy venture is a risk, but the SMR project is the only zero-carbon option for the city to replace its dependency on coal.
“We know that our coal plants are going to be retired within the next 15 years or so,” he said, which is why Hyrum signed on for a 10-megawatt share in the new plant.
According to Karlin, three of the original eight communities with the highest subscriptions (10 megawatts or more) have now exited the project, which Draper said means the UAMPS board must now meet to discuss how to redistribute the allocations.
Another component of the decision was whether or not the U.S. Department of Energy would commit to initial proposals of funding.
Nearly two months after Logan withdrew from the project, the D.O.E. announced about $1.4 billion to go to the project over the next 10 years. Though this cushions the project, Bradford said there’s never been a similar agreement in the 50 years he’s reviewed the economics of nuclear energy.
“It depends on congressional appropriations and D.O.E. priorities every year for the next decade,” he said. “And when you look at the pressure the federal budget is going to be under, or the reasons we’re all-too-familiar with, with COVID and the economy, it is not going to be easy to justify spending $1.4 billion on this one single project, especially as people come to appreciate that there are cheaper ways to do the same thing.”
While other regions have competitive regional power markets that conduct bids when looking for alternative energy sources, Bradford doubted the risk analysis and competitive price comparisons were opened for auction.
The SMR has been planned to consist of 12 modules and supply 720 megawatts as part of UAMPS’s Carbon Free Power Project in efforts to break away from coal as the leading fuel for the state, but cost for the project has nearly doubled in its three years of planning.
Though UAMPS had originally slated 150 megawatts as the threshold for the coalition’s involvement. After Logan, Lehi, Kaysville and, most recently, Murray withdrew from the project, UAMPS has signed on for about 120.
The project received another blow when the Idaho Falls City Council voted to cut the city’s megawatts agreement in half on Tuesday.
Both Heber and Bountiful city councils will meet this week to discuss possibly pulling out.