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Utah cities shouldn’t gamble on nuclear power

An Idaho project is a financial risk that is best borne by the private sector

A drawing of what would be the first-ever modular nuclear power plant.
A rendering of NuScale Power’s Small Modular Reactor nuclear power plant planned for construction at the Idaho National Laboratory. Several Utah municipalities have decided to invest in the plant, which would be the first of its kind.
NuScale Power

Energy sources are a hot topic. There’s geothermal being discussed in southwest Utah, hydrogen at the Intermountain Power Project, nuclear next door in Idaho, and then of course wind, solar, gas and coal. For some, these spark fierce views on one source versus another.

Not for us. We’re not into energy politics, and we don’t take positions on the sources or technologies themselves. But one of our critical missions is to protect taxpayers when it comes to the use of public funds, and we believe strongly that the taxpayers and communities of Utah should not act as venture capitalists for risky bets.

The bet that’s on the table now for Utah municipalities is nuclear. Specifically, it’s a type of nuclear called “small modular,” and the Utah Associated Municipal Power Systems (UAMPS) is recruiting towns and communities around the West to pay for it. The project, if it happens, would be located in Idaho.

Last fall, seven Utah cities from Logan to Lehi wisely withdrew their support for the UAMPS nuclear project due to financial risks that their residents should not be asked to accept. But many municipalities, such as Brigham City, Hyrum, Hurricane, and Washington City, are still gambling with their taxpayers’ dollars.

If modular nuclear power is ready for market, let the private sector show it by putting up its money. Governments ought to stay out of it, particularly when risking public funds.

The participation commitments UAMPS has been getting from Utah communities to buy the power come with required upfront payments from residents for a product that is full of uncertainty. The developer — Oregon-based NuScale — hasn’t built a plant like this before, its design keeps changing, and it’s nearly a decade away from even being potentially operational.

While we still believe the project is risky and that municipalities should withdraw, any investment of public dollars must be done in the open with public scrutiny. Sadly, the information exchange between UAMPS and its potential payers has been opaque. The public receives only a trickle of information, and it’s vague at best.

When we do see information, it’s troubling. For example, the project’s budget has ballooned from an initial $3.1 billion to a more recent estimate of $6.1 billion. It was only recently uncovered that the company that was going to operate the plant, Energy Northwest, backed out in March.

The financial sand is shifting in other ways, as well. In late June, UAMPS suddenly decided to reduce the number of modules at the power plant by half because they’ve struggled to get more communities to commit. That led to a hike in the power price that UAMPS had been promising, putting still-participating municipalities in a bind.

Imagine you picked up a gallon of milk that was labeled at $4, but by the time you made it to the cash register the price had gone up. Worse still, there was an automatic agreement that forced you to buy with no guarantee that the lid would ever open or that the price wouldn’t increase again by the time you had to pay. That’s essentially the situation in which UAMPS is putting municipalities.

Plenty of Utah city council members have listened to their constituents and said “thanks but no thanks.” Bountiful, Kaysville, Murray, Lehi and Heber were some of the largest subscribers to the modular nuclear proposal, but have since bowed out.

However, other communities remain officially interested in this particular power project, and are keeping it in their shopping cart so far. If you reside in these communities, pay attention and watch your wallet. There may still be time to withdraw from the project.

Utah municipalities should remain conservative watchdogs of tax dollars. Say yes to prudent and transparent use of public money. Say no to unproven technology and murky promises that keep shifting. At this point modular nuclear power is a venture, not a product. So let private venture capital come in and pay for it, not Utah taxpayers.

Rusty Cannon is President of the Utah Taxpayers Association