UAMPS promoting Carbon Free

Power Project in Idaho

 

Opposition says municipalities should

not be investing in risky technology

 

By Rhett Wilkinson

Staff writer

9-24-2020

 

MT. PLEASANT—The Utah Associated Municipal Power Systems (UAMPS) promoted the Carbon Free Power Project (CFPP) to Sanpete County leaders at a meeting Wednesday, Sept. 16.

City leaders from Mt. Pleasant, Spring City and Fairview listened to a presentation on using small modular nuclear reactors as a power source. Ephraim also participates in the project, but there was no city official in attendance because the UAMPS meeting coincided with an Ephraim City Council meeting.

UAMPS General Manager Douglas Hunter; Jackie Coombs, UAMPS manager of corporate and member relations and UAMPS General Counsel Mason Baker spoke with the Sanpete officials, which included Mt. Pleasant Mayor Michael Olsen and Mt. Pleasant Councilmen Justin Atkinson, Kevin Stallings and Russ Keisel; Spring City Mayor Cynthia DeGrey; and Fairview Councilman Casey Anderson. Others in attendance included Mt. Pleasant Power Superintendent Shane Ward and Spring City Lineman Kent Kummer. (Ward and Kummer are also UAMPS board members.)

The Utah Taxpayers Association and Healthy Environment Alliance of Utah oppose the CFPP. UAMPS, the UTA and HEAL Utah spoke about their perspectives on the project.

 

UAMPS’ promotion

“It’s not that we think that climate change is anthropomorphic or not. It’s that we think that the government will put in regulation [regarding climate change],” Hunter said. “The Clean Air Act is a great example of that.”

Hunter said that national climate change legislation could come as early as next year.

Baker said that UAMPS has a “price target” of $55 per megawatt hour based on revisions to the project cost estimate, which can be achieved given $1.4 billion in financial support from the U.S. Department of Energy. Agreements are finalized; UAMPS is just waiting to execute them until getting new DOE directives, Baker said.

If a city leaves the CFPP, the city has to repay within 12 months, Baker said.

There is what UAMPS calls “off-ramps” – they are points in time by when participants in the CFPP can depart from the project. The deadline for the current off-ramp has been extended to Oct. 31, Baker said.

In the fall of 2021, there will be a “unilateral off-ramp,” Baker said.

The CFPP has Republican support and “growing support from the Democrats,” with “good support” in both chambers of the U.S. Congress, Baker said. And if there is a change in presidential administration, UAMPS doesn’t foresee a change because the CFPP actually started when Democrat Barack Obama was the U.S. president, Baker said.

In Idaho, where UAMPS and small-modular-reactor company NuScale are planning on constructing the first commercial Small Modular Reactor (SMR) power plant, political support is strong for the CFPP. UAMPS has met with Idaho Attorney General Lawrence Wasden and he’s “very supportive,” Baker said. The Idaho Legislature passed a bill supporting the CFPP, Baker said.

Logan, Utah is one of three cities in Utah that have pulled out of the CFPP. The city “started to get political pressure” and he is “not surprised at all” that they pulled out, Hunter said.

It was a “reluctant decision” for the Logan City Council, Hunter said. (That is essentially corroborated by an Aug. 19 report by CacheValleyDaily.com.)

Hunter said he’s seen “a couple” of cities pull out in the past that have come back to the CFPP.

Stallings asked if the CFPP can grow onsite or if it is as big as it can get.

“We’re leading this in the nation and this will spark a renaissance like will never be seen before,” Hunter said.

Baker later told the Sanpete Messenger “We feel like we’ve got the project structured in the right way where we can move forward with developing it and doing it in a way that minimizes cost exposure.”

“There’s the ability to determine further development and get reimbursement back,” Baker said. “So we feel it’s a very prudent development approach and allows more flexibility to the participants.”

Baker said that “this type of resource … does compliment renewable resources.

“It is not a traditional baseload resource,” Baker added. “It’s very much a 21st-century resource that accounts for the changing power markets in the West.”

 

Opposition

Rusty Cannon, vice president of the Utah Taxpayers Association, has talked about the financial concerns with the CFPP.

“Municipal power companies should not be taking the financial risk that is built into this project by essentially acting as venture capital investors bearing the risk of cost overruns and delays,” Cannon has said.

“The potential risks far outweigh the benefits,” Cannon added. “If small modular reactor power produced carbon-free power at a competitive cost in the future, private industry would bear the risk to develop it. Municipal power companies could instead look to purchase power from such a project upon its completion without acting as a seed investor.”

The best-case scenario for cities invested in the CFPP is that they someday, after 2029, get market-rate power. The worse-case scenario is a commitment that at the next three phases of $19.9 million, $658.4 million and then $4.7 billion that could leave ratepayers and possibly taxpayers of these municipalities “holding the bag,” Cannon said.

“Subscription levels to the project have been a key indicator of the projects’ appeal and potential success or failure,” Cannon said. “The stagnant level of subscriptions at 30 percent – where it has remained for quite some time – is a clear indication of why the project’s risks are too high and why cities should withdraw. With the exit of Logan and Lehi, that subscription level is now even much lower.”

Kaysville has also exited the CFPP, Cannon said.

Grace Olscamp, communications and outreach associate for HEAL Utah, said if the CFPP goes through, it would mark the first time that Utah towns are subscribing to nuclear power – and since the CFPP is a first-of-its-kind project, “there will be a lot of curveballs and unknowns.”

The price of the CFPP has doubled in three years, from $3 billion to $6 billion, Olscamp said.

NuScale needs “all of the towns to lock themselves into it because it will guarantee that they have buyers,” Olscamp said. “So they are still in the process for doing it and they have different deadlines for committing each city or the cities … they are still in the process of finalizing all of that.

“As this project budget continues to balloon, what happens if they start it and the project begins to go over-budget?” Olscamp asked. “Who would be paying for it? Would it be the ratepayers via the city council?”

For HEAL, financial and health concerns are “definitely equal,” Olscamp said.

“But for these towns, the financial concern is far more important,” she said. “Lack of information and security in the financial factor has become a much larger concern.”

HEAL finds it curious that financially speaking, “Thus far, no major utilities have opted to invest into small modular reactors,” Olscamp said. “It seems like some have considered it, but so far there have been no commitments or concrete plans by big utilities like Rocky Mountain Power/PacifiCorp.”

 

Study

HEAL Utah commissioned an independent study last year from Energy Strategies, an energy modeling agency based in Salt Lake City that evaluated the potential economic effects of the CFPP. Energy Strategies discovered that other power portfolios were around 40 percent less expensive than the expected expenses of small modular reactors, according to The Salt Lake Tribune.

Generally, the study made the determination that the reactors would probably cost invested municipal ratepayers more than hundreds of millions of dollars throughout 20 years.

UAMPS chided the study for its evaluations being too broad and gave reason to not believe its conclusions.