Utah Taxpayers Association calls on cities to bail out of nuclear power project

The Utah Taxpayers Association is calling on the 27 Utah municipalities that are involved in a nuclear energy project to back out ahead of a September deadline that will commit them to further costs.

Rusty Cannon, the vice president of the Taxpayers Association, said his concerns about the project center around the possibility that the first small modular nuclear reactor in the country will face significant financial overruns in the future — and that Utah ratepayers will be the ones to bear that burden.

“We think it is unlikely this project succeeds,” Cannon said during a news conference conducted by phone on Tuesday. “And that’s why we’re calling for municipalities to stop the bleeding.”

Murray City, the only Salt Lake County municipality to sign on to the project alongside the Utah Associated Municipal Power Systems (UAMPS), has already committed $300,000 to exploring the project. And forging ahead beyond September would obligate the city to an additional $1.3 million for the next phase.

“That could be used for police, fire, streets, parks or any other function the city provides,” Cannon argued.

The city’s power fund budget for the 2020-2021 fiscal year was $40.2 million.

Construction for the proposed 12-module plant — which would be located at Idaho National Laboratory in Idaho Falls and produce a total 720 megawatts of electricity — is expected to cost $3 billion. But critics point out that cost overruns have plagued other nuclear projects throughout the years and worry the same will happen here.

The Taxpayers Association also notes that the project relies on a significant investment from the federal government in order to achieve the megawatt-per-hour rate promised to involved communities and that those dollars are far from certain, particularly in tough economic times.

“The pressures on the federal government on the federal budget just get greater and greater,” said Peter Bradford, a former U.S. Nuclear Regulatory Commission member who spoke during Tuesday’s news conference. “And so what was going to be in all likelihood an unsustainable commitment to cover the overruns in this project anyway just look bleaker and bleaker.”

LaVarr Webb, a spokesman for the Utah Associated Municipal Power Systems, said it’s true that some costs have gone up “as the project has been further refined” but said that, at the same time, the megawatt-per-hour rate promised to involved municipalities has decreased.

As far as federal dollars go, he said “nothing is guaranteed in life” but that UAMPS feels confident the Department of Energy is committed to the project.

“It’s about as firm as can possibly be,” Webb said. “We feel like it’s a small risk that it would not be funded.”

Murray and other cities interested in the project — which span the state from Lehi and Kaysville to Beaver and Parowan — see the small modular technology as a smart investment in a future without coal, as well as a way to diversify their power supplies so the lights stay on even if other renewable energy sources fail. They also think the technology may take off, with financial rewards to those who invested early.

If they stick with the project, the municipalities that have signed on aren’t expected to power their cities with nuclear energy until around 2029, a delay from an original projected date of 2026.

But if any of the involved municipalities do have misgivings before then, they have plenty of opportunities to leave the project over the next few years, Webb noted.

Murray City Power Manager Blaine Haacke said he’s not sure whether the City Council, which has two new members, will vote ahead of September to stay committed to the project. There are benefits to the undertaking, he said, but new technology also has the potential to “fall flat on its face.”

And while the city doesn’t take the potential for a $1.3 million commitment lightly, he noted that the money would be bonded and put back into the project, so those aren’t dollars the city needs to pay out now.

“We’re not scraping the sofa cushions for money,” Haacke said.

During a work meeting Tuesday, the Murray City Council received briefings from the Taxpayers Association and M. V. Ramana, a professor and physicist with expertise on nuclear power, that reiterated concerns about the potential impact of cost overruns on city residents.

Councilman Dale Cox said after Ramana’s presentation that he shared many of the same concerns. But he said he sees the project as a way to complement renewable energy “when we have three months of cloudiness or when the wind isn’t blowing.”

“I’m concerned about Murray Power, Murray citizens being able to turn the lights on,” he said.

But as the council moves toward a public hearing and vote on the issue in the coming weeks, Councilwoman Diane Turner, who has opposed moving forward with the power project in the past, said she hoped the presentations had “made the council realize there are plenty of red flags out there and to really think carefully when we take our vote.”

Also sounding the alarm about the financial burden of the small nuclear power project has been HEAL Utah, a clean-air advocacy group that has opposed the project since its beginnings, citing the large monetary investment for cities as well as the newness of the technology and environmental concerns around safe disposal of nuclear waste.

The organization commissioned an independent study last year from Energy Strategies, a Salt Lake City-based energy modeling firm that looked into the possible economic impacts of the project and found alternative power portfolios were roughly 40% cheaper than the projected costs of small modular nuclear reactors.

Overall, the study concluded the reactors would likely cost participating municipal ratepayers an excess of hundreds of millions of dollars over two decades, though UAMPS criticized the study for taking too wide of a lens and cast doubt on its findings.

Cities have until Sept. 14 to opt out of the project and avoid committing more funds to its next phase.