A Bad (and Costly) Nuclear Idea Comes to Utah

Around the country, the climate debate has latched onto the idea of replacing aging coal-fired power plants with nuclear plants to cut emissions from our power sector. To bolster that agenda, one Utah project is becoming a test case for the viability of future nuclear plants.

However, the latest evidence confirms that nuclear plants large and small will be enormously expensive to build for years to come. Until that changes, there’s no sense in making Utahns or all taxpayers bear the brunt of the costs for one bad idea.

Claiming to have a climate solution, nuclear industry developers are asking cities and towns throughout Utah to buy into a massive project using new, unproven technology that relies heavily on taxpayer subsidies. The industry’s bold claims, however, have a long history of falling flat, and public funds should not be used to support the precarious project.

We fight for Utah and national taxpayers by upholding a higher standard for how public funds should be used. Solar, wind, geothermal, battery storage, nuclear and other technologies all hold promise for the energy mix of the future — and we don’t oppose any outright — but not all are proven enough to warrant a withdrawal from the public purse. New, smaller nuclear reactors fit squarely in this category.

The long history of taxpayer support for the nuclear industry and its failure nevertheless make any new nuclear project a tough sell. The federal government has supported the industry since World War II with taxpayer subsidies embedded up and down the supply chain: royalty-free uranium mining on federal lands, discounted enrichment services, research and development support, tax breaks and an accident liability backstop.

For proof of the industry’s widespread failure, just look at the recently enacted federal infrastructure law. The measure includes a new “Civil Nuclear Credit Program” to spend $6 billion bailing out nuclear plants across the country – expressly because they are failing to compete in energy markets.

Now, the industry is tacking the other way by developing small modular, aka standardized, reactors (“SMRs”). A recent report from Taxpayers for Common Sense shows federal policymakers have already spent more than $1.2 billion supporting SMR development.

Learning from the past has never been Washington’s strong suit.

Most of this support – more than half a billion dollars – has been given to develop NuScale Power’s SMR design, starting with a 1999 government grant and continuing with renewed U.S. Department of Energy (DOE) backing since 2013. Subsidies ratcheted up when DOE committed $1.4 billion in 2020 to help Utah Associated Municipal Power Systems (UAMPS) build the first U.S. SMR plant using NuScale’s design in Idaho.

Such blatant winner-picking, without any nod to a competitive grant process, would be appalling on its own. But the project’s poor prospects make it particularly unworthy of public support.

UAMPS CEO Douglas Hunter recently asserted the project is poised to provide low-cost energy, with a levelized-cost-of-energy of $58/kwh over a 40-year period. Never mind that’s only a price “target” and NuScale will only stand by it and compensate UAMPS communities for any increases until the end of this year. After that, UAMPS members will be on the hook for cost increases.

Of course, the real risk comes from taking on a “first-of-a-kind” project like UAMPS is proposing. Hunter claims the example of Georgia’s Plant Vogtle, where costs have more than doubled to build two large reactors, is “irrelevant.” But factory production doesn’t guarantee low costs if it’s the first time the factory has been used.

Every industry learns how to cut costs as it goes – except the nuclear industry. Nuclear construction has a “negative” learning curve, where costs seem to increase over time.

The latest report from MIT’s Advanced Nuclear Power Program confirms that Vogtle won’t be a one-off; large nuclear plants won’t be cost-competitive until at least the tenth try, the report finds. In MIT’s assessment, its authors note that SMRs, like NuScale’s, are even more costly.

The SMR project’s risk of cost growth is well above any reasonable threshold for the use of public funds. In short, it’s time for policymakers to protect taxpayers and let private funders roll the dice on the nuclear industry’s dreams for the future.

Steve Ellis is president of Taxpayers for Common Sense, a nonpartisan budget watchdog that works to ensure that taxpayer dollars are spent responsibly and that government operates within its means.

Rusty Cannon is president of the Utah Taxpayers Association, which works to limit state and local taxes, making Utah an attractive place to live and do business.