When things go well, nobody notices electricity, and among all the organizations that provide this essential service, the ones with the lowest profile are municipal electric departments, special services districts, interlocals and co-ops; all community-owned utilities.
It’s been different lately, though. The Utah Associated Municipal Power Systems has drawn attention, because we are proposing something new: the Carbon Free Power Project, a cluster of small modular reactors that would serve the association’s members from a location in southeastern Idaho.
Some people don’t like anything nuclear. And they’ve pointed out that nobody has done this before, that natural gas is awfully cheap right now and that prices for electricity from solar and wind are falling.
All true. So why try something new? And why community-owned utilities?
Because we’re entering a period of global uncertainty, especially over climate and over the rules that will govern emissions from the electric power sector. It’s pretty clear that our coal assets aren’t going to be allowed to run forever and that we’ll need to replace them. If we end up with policies that discourage carbon dioxide emissions, as already exist in Europe and parts of the United States, then natural gas isn’t going to be cheap anymore.
Solar and wind will play a big role in our energy future, but it’s clear those can’t do the job alone. One of the reasons cited recently for California’s rolling blackouts was that wind turbines weren’t producing as had been expected. As we push toward 100 percent emissions-free electricity, our system will be more vulnerable to weather fluctuations.
We’re going to need emissions-free energy that is “dispatchable” — that is, that shows up when ordered. Batteries can help with fluctuations that last a few minutes or hours, but they are not on track to be cheap enough to tie us over longer periods.
Ask how to meet the electric system needs on a mild, sunny day in June, or a blustery night in March and the answers are obvious. Ask how to provide reliable electricity at reasonable cost 24 hours a day, 365 days a year, and the answer gets more complicated.
Both electricity demand and the supply from wind and solar vary by minute, hour, day and season. And supply and demand are each dancing to a different drummer.
The particular nuclear technology we’ve chosen is designed for a grid with highly variable wind and solar. And it will operate using a limited amount of water, which is important in the arid West.
And why us? Because community-owned utilities have more freedom to do the right thing. We don’t make quarterly reports to Wall Street. We don’t divide our loyalties between our stockholders and our communities; we don’t have stockholders, and our communities own us. That also means that our executives don’t avoid the tough decisions that might depress our stock and thus the value of our stock options.
And the right thing to do is to hedge our bets. The Carbon Free Project isn’t going to be anybody’s main source of electricity. It’s a hedge, a prudent step that we’re taking early, to keep our energy supply diverse and resilient.
We’re also taking aggressive steps, along with our partners at the U.S. Department of Energy, NuScale Power, Fluor Corp. and Idaho National Laboratory, to ensure that the clean, carbon-free energy produced at this plant will be affordable over the long term for member customers. The financial risks associated with the project have been substantially reduced.
In the electricity business, people sometimes hesitate to go first. It’s a conservative business model. But, in this case, conservatism means looking ahead and making prudent projections about the best path forward under conditions that are hard to predict, and hedging our bets. We didn’t build the economy we have today, and the country we have today, by refusing to innovate.
And we’re not alone in seeking innovation. Companies that supply more than half the electricity in the United States have pledged to go carbon-neutral by midcentury, and they don’t know today just how they’ll do that. They are counting on new technology, including new nuclear, to see them through.
We’re not setting out to be climate warriors. We’d be happy to go back to being under the radar. But we are seeing what’s best for our owners, our customers and our neighbors — who are all the same people.
We’d like those people, and their children and grandchildren, to have the benefits of a clean electric system, and of thoughtful, farsighted decisions today that did a good job of managing risks of the tumultuous 2020s and 2030s.
Doug Hunter
Doug Hunter is the chief executive officer and general manager of Utah Associated Municipal Power Systems.