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Lehi, Logan Back Out Of First-Of-Its-Kind Nuclear Power Plant Project Citing Financial Risk

Photo of Logan Utah skyline.
"Logan, Utah" by windy_sydney is licensed with CC BY-NC 2.0. To view a copy of this license, visit https://creativecommons.org/licenses/by-nc/2.0/
The City of Logan is the Cache County seat and has a population of 51,000. Officials there had planned to use seven megawatts of power from the plant.

Two Utah cities have pulled out of a nuclear power plant investment — saying the financial risks are just too high. But 28 other towns and service districts in the state are still involved in the project, which is organized by a utility cooperative called Utah Associated Municipal Power Systems, or UAMPS. 

The Carbon Free Power Project involves a first-of-its-kind technology called “small modular nuclear reactors”, which would produce around 720 megawatts of nuclear energy.

UAMPS and the U.S. Department of Energy have invested $3 million in the project since it began in 2017. But the reactors are still in development, and it’s unclear how much the project — and the power — will ultimately cost. 

That’s one reason the city of Logan cited in its decision to leave the project ahead of a Sept. 30 deadline to invest in its next phase, which is expected to cost $130 million. Logan was planning to use seven megawatts of power from the plant and has put around $250,000 into the project based on that amount so far. The city would have had to put in another $654,000 over the next three years to remain invested in the project. 

The cost could continue to grow, according to Mark Montgomery, director of light and power for Logan. He told the city council that Logan could end up having to pay millions into the project during the second phase of its licensing period, from 2023 to 2025.

“I think I would rather sign up for a power purchase agreement at a later date, even if it was a higher cost,” Montogmery said. “Then I would know for sure what my budget is on that power. 

Montgomery also cited concerns that it’s still up in the air whether the Department of Energy will invest in the project. The department pledged to fully fund the first reactor in 2018, but it went back on that deal. Now, it plans to invest $1.4 billion in the project — about a quarter of its total $6 billion price tag. That agreement is not yet final and the appropriation would need to be approved by Congress. 

The city of Lehi also voted to leave the project during a city council meeting this week. So far, Lehi has invested $455,000 in the project for a 21 megawatt subscription. Power Director Joel Eves said the project has struggled to find new investors, while its budget almost doubled to $6 billion from $3.4 billion since 2017. 

“A big piece of this is project subscription, and that does make us nervous,” Eves said. “It seems like we’re going at this alone as UAMPS members.” 

So far, investors in the project have only claimed around 200 megawatts of the total expected output. Eves said UAMPS has stepped up marketing to try to bring other investors, or subscribers, into the project, but the efforts have only succeeded in bringing one municipality — Wells, Nevada — on board. 

LaVarr Webb, a spokesperson for UAMPS said the cost of the project will not increase for other participants, which include 26 cities and two service districts in Utah, because Logan and Lehi dropped out. He also said a number of utilities in the Northwest are interested in the project but have not invested yet. 

Leaving the project means both Logan and Lehi lose the money they’ve put into it so far. And it’s unclear whether they will be able to purchase power from the plant, if and when it is completed.

Kate Groetzinger is a Report for America corps member who reports from KUER's Southeast Bureau in San Juan County. Follow Kate on Twitter @kgroetzi

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