DALLAS — When it comes to nuclear energy, Utah Associated Municipal Power Systems is thinking small.
Rather than planning a single multi-billion-dollar power plant like those that have caused delays and cost overruns elsewhere, UAMPS envisions a series of small modular reactors at a single site that could grow as needed for its 46 member utilities.
UAMPS expects to decide by April whether to move forward with the project known as the Western Initiative for Nuclear, or WIN, in partnership with NuScale Power of Corvallis, Ore., and Energy Northwest in Washington State.
The proposed site for the plant is at Idaho National Laboratories, where the first electric power from nuclear energy was generated on Dec. 20, 1951.
Initial financing for design and permitting could come as early as next year, according to Doug Hunter, general manager of UAMPS.
"This could be the first small modular reactor in the whole world," Hunter said. "We really are out leading the way on this kind of project. We haven't excluded any type of financing."
Under current plans, UAMPS would own the plant while Energy Northwest would be the operator. Power would be sold on a take-or-pay basis.
UAMPS carries ratings on its conventional wholesale power projects of A-minus from Standard & Poor's, A3 from Moody's Investors Service and A from Fitch Ratings. Outlooks are stable.
Energy Northwest's ratings are AA-minus from S&P, Aa1 from Moody's and AA from Fitch with stable outlooks. ENW has 27 members, consisting of 22 public utility districts and the cities of Centralia, Port Angeles, Richland, Seattle, and Tacoma, Wash.
"The reason that Energy Northwest teamed with this is that we operate the only commercial nuclear energy facility in the Northwest, which is the Columbia Generating Station," said Laura Scheele, senior public affairs analyst at Energy Northwest. "We've done so safely and effectively for three decades. In fact, we celebrated our 30th anniversary Dec. 13."
The Washington State Legislature has a nuclear energy task force that is looking into SMRs. The eight-member panel voted earlier this month to continue investigating whether the state should invest in the technology next year.
"It's something that is generating a lot of interest here in the Northwest particularly given the new EPA rules and the desire to lower carbon emissions," Scheele said.
While small modular reactors — or SMRs — are still in the development stage, the concept traces its ancestry to the naval reactors that have powered all U.S. nuclear submarines and aircraft carriers since 1975. U.S. Navy research into nuclear propulsion systems still goes on at the Idaho National Laboratory.
The International Atomic Energy Agency defines a small reactor as one that produces less than 300 megawatts of electricity, though SMRs are generally much less powerful. The term "modular" refers to the ability to manufacture the reactors in a series, rather than building them on site.
SMRs would use "passive safety" concepts that are already applied to nuclear power plant construction around the world. The design allows the reactor to shut down automatically, if necessary, using natural forces including gravity and convection.
"A NuScale unit can safely shut down, self cool for an indefinite period of time with no operator action, no AC or DC power and no additional water," said NuScale co-founder and chief technical officer Jose Reyes at a presentation at a nuclear energy conference in South Carolina last year. "We believe this is a major breakthrough for nuclear power."
The safety features were demonstrated in a 2013 documentary about nuclear power called "Pandora's Promise," which Hunter showed to his members at a meeting last August. "These things are inherently safe," Hunter said. "We can put them in as we need them. We are not exposing our members to economy of scale risk."
A single NuScale unit is expected to produce 45 to 50 megawatts of electricity with a cylindrical reactor measuring 15 by 76 feet. The SMR would be immersed in water below ground and require no outside power source.
By contrast, the Columbia Generating Station in Richland, Wash., produces 1,170 megawatts, about 10% of the electricity generated in the state. The station is an improved version of the type of reactor used at Japan's Fukushima Daiichi nuclear power plant. The Fukushima plant became the focal point for anti-nuclear forces when an earthquake and tsunami led to a shutdown of the cooling system and radiation venting on March 11, 2011. The region around the plant has not recovered from the disaster.
"The events in Japan have sharpened arguments that have been in wide circulation throughout the technology's troubled history," researchers Ahmed Abdulla and Ines L. Azevedo at Carnegie Mellon University's Department of Energy and Public Policy wrote in a report last year. "These can be divided into four categories: safety of reactor operations; spent fuel stockpile management; possible diversion of fuel for weapons proliferation; and high capital cost."
Despite the public controversies surrounding nuclear power plants, Moody's Investors Service said in a Nov. 24 report that for most utilities, including nuclear power in their portfolio is a positive credit factor.
"Although expensive to build, once in operation, nuclear plants typically provide large-scale and reliable sources of electricity generation and profits in many energy markets," Moody's analyst Michael G. Haggarty said. "Nuclear plants act as base-load generating units, operate around the clock and are usually economical from a marginal cost-of-power standpoint."
While the U.S. Department of Energy has sought to streamline the permitting process, the first nuclear power project under construction in the U.S. in 30 years continues to see costly delays. The original budget for the Vogtle Nuclear Project, led by investor-owned Georgia Power in Waynesboro, Ga., was expected to be approximately $14 billion. The projected cost has increased to $15.5 billion following recently announced cost increases and schedule delays.
The Vogtle nuclear construction project is a partnership between Georgia's three major electric utilities, including the electric cooperative Oglethorp Power and the public Municipal Electric Authority of Georgia.
"While the large and complex project has increased the business and operating risk profile of all three utilities, the diversification of risk among the three utilities is an important credit positive," Haggarty noted.
For UAMPS, nuclear power — despite the construction and permitting risk — is considered the best alternative to coal-fired plants as the company aims for a carbon-neutral profile by 2024. The life of an SMR is projected to be 60 years, with refueling every two years. UAMPS has also pursued alternative energy projects of various sizes to reduce its carbon footprint.
"Right now, we're reaching our goal at 20% clean energy while still trying to keep the rates low for our customers," said Matt Draper, a UAMPS Board member from Hyrum City, Utah. "I believe that nuclear is something that we should consider and I believe that it is the base load power of the future."
Long range, Hunter envisions replacing coal plants with the small nukes, taking advantage of existing water sources and transmission lines.
The cost of the small reactor is a matter of conjecture at this point, but estimates for a single unit have been discussed at about $200 to $250 million, with a 12-reactor plant in the range of $2.8 billion to $3 billion.
Abdulla and Azevedo estimated electricity costs from a 45 megawatt light-water reactor could range from $77 to $240 per megawatt hour. That compares to $56 to $120 per MWh for a large reactor. Five-sixths of total electricity sales in the U.S. in 2012 cost consumers less than $130 per MWh, they reported.
"Controlling construction duration is important, and, given the price of electricity in some parts of the U.S., it is possible to construct an argument for deploying SMRs in some locations," they wrote.
NuScale's light-water SMR design was developed at Oregon State University under the direction of Reyes in the early 2000s as a joint project with the Idaho National Laboratory. OSU licensed the technology to NuScale, and still owns a small stake in the private company.
After problems with a previous investor, Fluor Corp., a global engineering and construction giant with a 60-year history in commercial nuclear power, acquired a majority share in NuCorp in 2011.
Backed by $217 million of federal funds, the NuScale project is in development at the same time as another SMR effort led by the mPower America team of Babcock & Wilcox, Tennessee Valley Authority, and Bechtel. The mPower team has set a goal of beginning operations in 2022, while NuScale's target is 2024. Five other SMR projects are also competing for Nuclear Regulatory Commission design approval.
"The NuScale SMR design offers an impressive mix of safety, scalability, transportability, and economics, as well as an advanced state of design maturity that should achieve commercial operation in the 2025 timeframe," according to a statement from the U.S. Department of Energy.
With so many hurdles yet to clear, any of the seven projects could still run into insurmountable obstacles.
"We're still looking at fatal flaws," Hunter said. "We have no fatal flaws that we can identify."
Critics of nuclear power question whether the SMR can actually overcome the construction, safety and security risks of large reactors.
"Even if SMRs could eventually be more cost-effective than larger reactors due to mass production, this advantage will only come into play when many SMRs are in operation," noted a September 2013 report, "Small Isn't Always Beautiful," from the Union of Concerned Scientists.
"But utilities are unlikely to invest in SMRs until they can produce competitively priced electric power," the report said. "This Catch-22 has led some observers to conclude that the technology will require significant government financial help to get off the ground."
The UCR also notes that the U.S. government has failed to deliver on promises to create a permanent repository for used, but still dangerously radioactive, nuclear fuel.
UAMPS downplayed the issue in an August white paper.
"After decades of problem-free, on-site storage, in many cases in the midst of population centers, such concerns have diminished considerably," it wrote.
For UAMPS, the price of power will be a critical factor in deciding on small reactors.
"Our goal has been to not increase the cost of generation," Hunter said. "This proposal is less expensive than our coal plants are with the clean-up technology."
NuScale is working toward a certified design by the third quarter of 2016.
The Project WIN initiative was unveiled at the Western Governors' Association annual meeting in Park City, Utah, in June 2013. At that meeting, the governors announced a 10-year "energy vision" which included finding ways to accelerate the introduction of SMRs.
Since then, UAMPS has worked to explain to its member utilities from Utah to California how nuclear power could prove beneficial.
"SMRs are dramatically different than the enormous large-reactor plants built in the 1960s," said a UAMPS report to its members. "The technological differences are like comparing a 2014 Prius hybrid to a 1960s-era Cadillac, complete with enormous fins and terrible gas mileage. UAMPS believes SMR technology holds promise and is committed to investigating, over the next several months, all aspects of an SMR plant."
