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Tough Economics for UAMPS Small Modular Reactors

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The cluster of nuclear reactors are planned to be built in Idaho by 2026. But the plan including filling a $2.1 Billion financing gap with your money. A group called the Utah Associated Municipal Power Systems (UAMPS) wants to build 12 nuclear power reactors at the Idaho National Laboratory. The reactors would have a total capacity of 600 MW, and most of their electricity would go out of state.

UAMPS functions as an electricity wholesaler for member utilities. UAMPS was bedazzled by developers’ claims about small modular nuclear reactors back in 2012. It eventually convinced more than 30 of its members to pursue the project.

Since January it’s been on the road seeking firmer financial commitments and running into some pretty grim economics. Even in Los Alamos County, NM, surely one of the most pro-nuclear places in the country, the Council vote to go forward squeaked through 4 to 3.

UAMPS claimed it would not proceed with reactor construction unless its members subscribed to all 600 MW. But UAMPS is less than 1/3 rd of the way there.

Wonder why? The reactors’ full output was always far more than the members needed. In addition, since 2014, the timeline for the project has gotten three years longer – and $1 billion more expensive.

That’s right. One 600-MW nuclear power project will now cost $4.2 billion…and counting.

Low subscriptions are a real problem for UAMPS. Subscriptions are part of what UAMPS will use as collateral for short-term development loans. A subscribing utility signs a “take-or-pay” contract with just a couple of early off-ramps. After that, its penalized if it doesn’t pay “regardless of whether the Project is completed, operable, operating, damaged, destroyed or terminated.”

Enter the government – waving your money. UAMPS will be using public money as collateral for short-term loans covering long-term debt.

NuScale, the reactor designer, has already gotten hundreds of millions of dollars from US taxpayers. UAMPS is counting on a 50% cost share with the federal government to develop and build the reactors. The federal government just released a supposedly competitive $30 million Funding Opportunity Announcement that can only go to the Idaho project. This spring, Congress made sure that UAMPS will be eligible for federal nuclear production tax credits – if the reactors ever go online. The Idaho National Laboratory plans to use the first 2 reactor modules for “research,” but it’s not clear if INL will own or lease the reactors. The Idaho State Legislature just gave UAMPS breaks on both its property and sales taxes.

The path UAMPS and NuScale are following is familiar. The Union of Concerned Scientists studied all government subsidies for nuclear power since its inception. They concluded that it many instances, it would have been cheaper for the government to just buy the electricity and give it away for free.

You can read more about the proposed reactors’ environmental effects in Idaho at http://snakeriveralliance.org/say-no-to-more-waste-less-water.

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