Utah cities are sticking with their nuclear power plan after a hefty price jump

‘Carbon Free Power Project’ still needs a lot more participants; Morgan City drops out to install solar and batteries instead.

(NuScale Power) Rendering shows what the Carbon Free Power Project would look like at Idaho National Laboratory. The plan calls for six 77-megawatt nuclear reactors.

This story is part of The Salt Lake Tribune’s ongoing commitment to identify solutions to Utah’s biggest challenges through the work of the Innovation Lab.

Some Utah cities are willing to dig deeper to become nuclear-powered.

Utah Associated Municipal Power Systems recently updated the 27 entities pursuing construction of several small nuclear power generators in Idaho, and the $58-per megawatt hour cost has now grown to $89, mainly due to inflation and the rising cost of steel.

That price jump meant that the cities had an off-ramp to walk away from the Carbon-Free Power Project before any money has been spent on building what is now estimated to be a $9.3 billion endeavor. The project would not produce power until 2029 at the earliest.

Still, only the small city of Morgan opted out. The city of Parowan also voted to reduce its commitment by a third, but stayed in. And Los Alamos County, N.M., increased its commitment.

Ty Bailey, city manager for Morgan, said the decision to opt out wasn’t just about the rising cost. “It’s more about having other alternatives. That’s a big project, and up to this point we haven’t seen other alternatives.”

He said the city now is looking at building its own solar and battery-storage facility to make up what the nuclear plant would provide.

The 26 entities that stayed in CFPP are mostly small cities in Utah, but it does include systems in New Mexico, Nevada and Idaho. UAMPS originally invited all 50 of its members to join the project, but many including Logan, Bountiful and Murray pulled out over cost concerns.

Harder to find ‘baseload’

UAMPS has been working with Oregon-based NuScale to build what would be the nation’s first “small modular reactors” at Idaho National Laboratory west of Idaho Falls. The reactors would still be powered by the nuclear fission of uranium, but NuScale has said their design is inherently safer than current nuclear power plants. They also maintain that the small reactors can be mass produced, which would lower costs.

For UAMPS entities, the challenge to find new “baseload” power is growing more acute. Baseload power is the energy needed to keep the electrical grid energized when intermittent sources like solar and wind produce less. UAMPS recently lost coal-fired power from the San Juan Generating Station in New Mexico when it closed last year, and years of drought have cut into the amount of hydropower available from Glen Canyon Dam and other hydropower sites. Battery storage systems are in a similar price range to the nuclear project.

UAMPS acknowledges that the cities in the project are not nearly enough to move ahead with construction, and it is trying to find more participants. The project aims to produce 462 megawatts of power, and UAMPS’ current commitment from the 26 entities is only 119 megawatts. UAMPS spokesperson Steve Handy said UAMPS needs to have at least 370 megawatts committed by the end of this year for the project to proceed. If they don’t reach that commitment, the cities will have another off-ramp to exit before incurring construction costs.

“Currently no additional utilities have joined the CFPP, although positive discussions are underway with a number of interested parties,” Handy said. “We hope to make announcements in the near future.”

Los Alamos – where they have been splitting atoms since the 1940s – opted to increase their commitment four-fold, going from 2 megawatts to more than 8. That increase more than offset the Morgan and Parowan reductions. Unlike Utah, New Mexico has a state law that requires electrical utilities to be carbon-free by 2045.

An embrace from the feds

The U.S. government has given CFPP its blessing in the form of cash and sign-offs. Clean-energy incentives in the Inflation Reduction Act passed last year, combined with previous commitments, mean the federal government would cover 45% of the $9.3 billion cost.

And the U.S. Department of Energy announced in January that the NuScale design has been certified as the first “small modular reactor” design in the country.

“The published final rule allows utilities to reference NuScale’s SMR design when applying for a combined license to build and operate a reactor,” according to a DOE announcement.

“SMRs are no longer an abstract concept,” said Assistant Secretary for Nuclear Energy Kathryn Huff. “They are real and they are ready for deployment thanks to the hard work of NuScale, the university community, our national labs, industry partners and the NRC. This is innovation at its finest and we are just getting started here in the U.S.!”

The opponents of SMR remain unconvinced. They note the nuclear industry’s long history of cost overruns, and they point to NuScale’s rising estimates as evidence of more of the same.

‘A serious financial threat’

“The first-of-its-kind SMR is a serious financial threat to the member communities of the Utah Associated Municipal Power System that have signed up for a share of its power and to any other communities and utilities thinking about doing so,” said the Institute for Energy Economics and Financial Analysis.

And a recent study by a former Nuclear Regulatory Commission chair indicated that small modular reactors will produce more nuclear waste than large-scale nuclear plants. Another study from Argonne National Labs found no additional waste from SMRs. NuScale maintains the first analysis relied on old data and it has demanded a correction, but the authors stand by their assessment.

Bailey said the city of Morgan’s needs are relatively small, and opting out of CFPP allows the city to produce its own power rather than contracting with outside entities. He said the city is looking at sites in the city for a solar and battery project to replace the 1.5 megawatts that would have come from CFPP. He believes the project can be up and running well before CFPP would come online in 2029.

“One other thing that changed is the Inflation Reduction Act,” Bailey said. There is federal money available for communities under 10,000 people to upgrade their power, and that helps cover the upfront costs. “We can do it on a grant instead of just on rates.”

Tim Fitzpatrick is The Salt Lake Tribune’s renewable energy reporter, a position funded by a grant from Rocky Mountain Power. The Tribune retains all control over editorial decisions independent of Rocky Mountain Power.