The Utah Taxpayers Association released the following:
Last fall, seven Utah cities from Logan to Lehi wisely withdrew their support for a proposed nuclear power plant due to financial risks that their residents should not be asked to accept. Because these were some of the project’s largest subscribers, and combined with the federal government decision to change its participation in the project, the commitments to purchase power from the plant were reduced by more than 50%.
At that time, eighteen other Utah cities, including a few larger subscribers like Brigham City, Hyrum, Hurricane and Washington City, voted to continue to expose their electricity customers and taxpayers to these financial risks, despite the fact that the project’s budget had ballooned from $3.1 billion to $6.1 billion. Since then, new information has emerged that makes it clear the project faces even more financial uncertainty.
These remaining participants have until July 23rd to decide once again whether to continue their commitment to this ill-conceived attempt to risk public money.
In February, it was confirmed by the Utah Associated Municipal Power Systems (UAMPS), the project’s developer, that commitments to the project had shrunk from 213 megawatts (MW) to only 101.6MW (a decrease of more than 52%). Then in March, UAMPS disclosed to its members that Energy Northwest had pulled out as the operator of the proposed nuclear plant.
Most recently, in late June, UAMPS members voted to cut the size of the proposed project in half. These recent changes in the project’s status trigger an opportunity for participating cities to withdraw and end their financial obligations and avoid further financial exposure. On June 24th, cities were given twenty-seven days by UAMPS to make this multi-million dollar decision. If they pull out, they are still on the hook for all of their previous financial commitments to support the project’s development costs to date. In some cases, this will run into six figure payments from their city coffers, despite foregoing the rights to receive any power from the plant- if indeed it is ever built. They are now caught in a classic cycle of throwing good money after bad.
If these communities decide to continue taking this gamble, they still need to find customers for the majority of power that would be generated. UAMPS now claims it has several “letters of intent” and other expressions of interest from utilities the Pacific Northwest, Arizona and California. They made similar claims in 2020 but, despite having a full time sales person recruiting new customers that year, they sold only one megawatt of additional subscription. That was before Logan and Lehi jumped ship, along with Bountiful, Kaysville, Murray, and Heber (some of their largest subscribers).
To be clear, the Utah Taxpayers Association takes no position on the pros and cons of this or any other nuclear power technology. But we do believe in full public disclosure. While UAMPS’ regularly posts information about speculative or minor developments that make the project appear viable, it has not posted information about any of the major setbacks mentioned above. This lack of transparency leaves city council members in Utah’s participating communities voting based on sales-type information rather than an objective analysis of the most prudent use of public funds for energy development.
By voting to remain involved, these city councils are committing their residents to fixed rates over the next twenty years or more for electricity that may quickly become non-competitive in the market. The Utah Taxpayers Association also believes that Utah’s small cities should not be acting as venture capitalists for financially unstable power projects. City councils are and ought to continue to be watchdogs of public funds rather than speculative investors. We continue to urge the remaining Utah cities in the project to make the prudent decision and vote to exit.