This is in response to Sen. Duane Ankney’s recent op-ed.
The recent opinion editorial extolling the benefits of nuclear energy sounded very familiar, and Senator Duane Ankney contends that nuclear energy is the key to Montana’s energy future. But let me provide a few words of caution from Utah, a neighboring state where six large municipal utilities initially committed to participating in a new nuclear power project and then walked away when the financial risks became too great.
The history of nuclear power has been a trail of broken promises from 1971, when the Washington Public Power Supply System’s abandoned Hanford nuclear plant project became the largest municipal bond default in history, to the VC Summer project in South Carolina, which was abandoned in 2017 after the project budget doubled to $25 billion and the scheduled completion date slipped from 2016 to 2024.
Both projects left ratepayers on the hook to pay for projects that would never deliver a single kilowatt of power. And there are many more examples in between.
A few years back, a company named NuScale partnered with a consortium of small municipal utilities to develop a nuclear power project involving new technology – small modular reactors (SMRs). It promised low-cost energy and reliability. Almost 30 municipal utilities jumped on board, signing power-purchasing agreements to fund the project through the issuance of bonds that ratepayers would repay.
The initial $3.1 billion budget quickly doubled to $6.1 billion, and they are still many years away from plant construction. Unfortunately, the project is being planned behind closed doors, and the public cannot see the assumptions and calculations being used to estimate the project’s costs.
Six of the largest municipalities facing these escalating cost commitments withdrew from the project. The finance director in Logan, Utah, convinced the city council to withdraw from the project saying, “…we’re the last entity that should be participating in risky endeavors. We should participate in the 4th or 5th iteration of this project. By that time, I guarantee that the costs will come down to whatever market rate for nuclear power.”
After this departure of subscribers, the size of the proposed plant was cut in half, yet NuScale still insisted that economies of scale would keep the rates competitive. To date, the project only has commitments for 20% of the power it says it can generate, even with the downsized plant. All of this should come as no surprise.
According to the U.S. Department of Energy, a recent news report said that the actual costs of 75 of the more than 90 existing nuclear power reactors in the U.S. exceeded the initially estimated costs of the units by over 200%. We can expect more of the same from this new nuclear technology, which is only in the design phase and is many years away from being commercially viable.
In February, the Institute for Energy Economics and Financial Analysis (IEEFA) released a report about the financial viability of NuScale’s proposed SMR technology. IEEFA concluded that this novel technology is risky for a few reasons: It’s never been built, operated, or tested; NuScale’s project is years behind schedule; and, most notably, it’s way over budget. IEEFA concluded that NuScale’s estimates for cost, time, and flexibility were already out-of-date and exceedingly expensive compared to currently available renewable energy technology combined with electricity storage.
If Montanans believe that this new and untested nuclear technology is a promising path to transition the power, jobs, and economic benefits of coal plants like Colstrip, then ask private investors, not ratepayers, to take the initial financial risks. Or better yet, put out a request for proposal with the power generation specifications, and find out who with the best track record can do it the cheapest and fastest.
As for the lessons from Utah, ask the cities of Logan, Kaysville, Bountiful, Murray, Heber, and Lehi why they decided not to gamble their citizens’ money on these still-experimental, small modular reactors.
Scott Williams is the Nuclear Policy Associate for HEAL Utah.