Utah yanks nuclear project amid faltering support from cities

BY SourceMedia | MUNICIPAL | 11/28/23 02:11 PM EST By Caitlin Devitt

The Utah Associated Municipal Power Systems has dropped plans to build a first-of-its-kind nuclear plant amid dwindling support from cities on the hook to pay for the electricity.

UAMPS, comprised of 50 municipally owned power systems across six Western states, was working with Oregon-based NuScale Power, LLC, to launch the nation's first small modular reactor to be housed at the Department of Energy's Idaho National Laboratory. The Department of Energy in 2020 awarded $1.355 billion to support the work over 10 years.

Advocates say SMRs cost less than traditional nuclear plants, which are notoriously expensive, in part because the modules are built offsite in factories and shipped to the plant site.

Dubbed the Carbon Free Power Project LLC, the UAMPS project was to be the first operable SMR in the country.

"This should have been the easiest, if not one of the easiest, to license, to fund and to build," said David Schlissel, director of resource planning analysis at the Institute for Energy Economics and Financial Analysis. "It shows that the history of the nuclear power industry of overpromising by understating the costs of new reactors, and how long it's going to take to build them, is still around."

The cancellation marks a setback for hopes that new nuclear technologies may help reduce carbon emissions. The Inflation Reduction Act and Infrastructure Investment and Jobs Act provide billions for advanced nuclear technology like SMR, which the Biden administration has said could help the country achieve its goal of reaching 100% clean energy electricity by 2035 and net-zero emissions by 2050.

In the works for 10 years, the price tag had climbed to $9.3 billion up from earlier estimates of $4.1 billion. UAMPS and NuScale needed agreements to buy at least 80% of the energy output but reportedly only had 26%. Several municipalities over the years took advantage of contract off ramps to drop out, leaving only 26 participants. The remaining members voted on Nov. 7 to terminate the deal.

The termination is "very disappointing," said UAMPS CEO and general manager Mason Baker in a statement. But it's the "best course for the UAMPS members," Baker said. "We look forward to continuing to provide innovative and cost-effective new resource solutions to our members and at the same time we hop NuScale is successful in deploying its technology."

The parties said they're in talks with the Department of Energy about the $1.35 billion award.

"NuScale and UAMPS are engaged in ongoing dialogue with the DOE on the future of the CFPP cost share award and the disposition of CFPP project assets, including the ownership of long-lead equipment," a UAMPS spokesperson said, adding that participating municipalities had not been billed.

Meanwhile, NuScale investors have filed a class-action lawsuit alleging the company failed to disclose that it wouldn't be able to attract enough subscribers.

There are dozens of SMR projects with different technologies in development around the world, with Russia reportedly launching the only operational one so far.

In the U.S., Microsoft (MSFT) founder Bill Gates and Berkshire Hathaway (BRK/A) have launched an SMR project on the site of a retiring coal plant in Wyoming, and similar projects are advancing in Washington and other states.

Schlissel said the technology remains too expensive and uncertain to hang on taxpayers and ratepayers.

"The government is running around cheerleading all these new nuclear designs and how cheap they're going to be without having built one," he said. To reach net zero targets by 2050, the country should focus first on cheaper energy alternatives like solar, wind and geothermal, Schlissel said. "Let's keep doing research" on nuclear technology, he said. "We don't have to build them today."

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