Los Alamos Reporter

County’s Continued Participation In Carbon Free Power Project To Be Reconsidered By Council, Board Of Utilities July 21 And 27

COUNTY NEWS

Los Alamos Board of Public Utilities (BPU) and the Los Alamos County Council will decide whether to continue in the Carbon Free Power Project (CFPP) on July 21 and July 27, respectively.  The CFPP is a proposed nuclear power generating facility to be built at the Idaho National Laboratory using first-of-a kind small modular reactor technology developed by NuScale Power.  The project is going back to the BPU and Council this month for consideration, since the project participants voted this past June to reduce the number of small modular reactors in the proposed CFPP from 12 to six.

Slated to be fully operational by 2030, the Los Alamos Department of Public Utilities (DPU) has been pursuing this project since 2015 as an option to diversify its energy generation portfolio with firm, carbon-free energy and to meet a BPU goal for the DPU to be a carbon-neutral power provider by 2040.  The project is being negotiated between the U.S. Department of Energy (DOE), NuScale Power and the Utah Associated Municipal  Power Systems (UAMPS), a joint-action governmental agency comprising multiple municipal-owned utilities of which 28 are participating in the nuclear project, including DPU.

To mitigate the risk associated with first-of-a-kind technology, UAMPS has structured into the project negotiations with DOE and NuScale the following:

  • DOE grants in the amount of $1.355 billion for the preparation of the Combined Operation and License Application (COLA).  DOE cost share funds will be used during the earlier stages of the project where the risk is deemed the highest. 
  • Multiple off-ramps throughout the process to allow each project participant the ability to unilaterally exit the project,
  • Reimbursement of most funds expended by project participants. UAMPS and NuScale signed a Development Cost Reimbursement Agreement (DCRA) that provides for 100 percent reimbursement to the project participants if there is a failure of the Economic Competitive Test (ECT) of the target price per megawatt hour through the COLA development phase of the project.    

Last August, both the Board and Council considered such an off-ramp decision. They voted to continue in the next phase of the project to reach full subscription level in the facility and prepare the COLA with a budget cap of $1,260,000 until the next off-ramp decision in 2022.  Board and Council also provided the DPU Utilities Manager authority to increase or decrease the county’s subscription level as appropriate. At that time, the County was subscribed to 11.2 megawatts from the proposed 12-modular facility with a target price of $55 per megawatt hour. In November 2020, to stay within the County’s budget cap, the Utilities Manager reduced the county’s subscription level to 6.37 MW.

The decision last June to reduce the number of modules in the CFPP from 12 to six was based on the small modular reactor output. Since the project began, NuScale has uprated the electrical power output rating for each SMR from 50 MW to 60 MW and now, more recently to 77 MW. At 12 modules, the output of the facility increases to 924 MW, making it more challenging for UAMPS to find project participants in the region to subscribe for the additional power. With this new information UAMPS project participants voted on June 25, 2021, to scale down the CFPP plant from its original proposed 12 modules to six, reducing the output to 462 MW.  A smaller nuclear plant improves the  ability to obtain full subscription with only a minor increase to the target price, going from $55 to $58 per MWh.

Because of this change, a new off-ramp decision point was inserted by UAMPS and the project is now returning to each project participant’s governing body for a vote. DPU Utilities Manager Philo Shelton explains that the Board will consider the new go-no-go decision based on the current CFPP parameters at the hybrid, in-person/virtual Board of Public Utilities meeting on Wednesday, July 21 in Council Chambers at 5:30 p.m.  Board members and staff will attend the meeting in person at the Municipal Building at 1000 Central Avenue and members of the public are invited to join in person or virtually through the Zoom platform. Council will consider the decision on July 27 at 6 p.m. also in Council Chambers and conducted as a hybrid meeting.

Shelton further expanded that he is recommending that Board and Council maintain the same budget investment of $1,260,000 as approved last year with the reduced County’s subscription level at approximately 1.8 MW. “Currently UAMPS is in receipt of multiple letters of interest or LOI’s from other municipalities that would like to join the project. These LOI’s exceed the smaller plant’s capacity. If they are all successful, then the CFPP will be fully subscribed.  This is good news for the CFPP and UAMPS to eliminate the risk of insufficient subscription levels. As the amount of interest is confirmed, we, as early adopters in the project, will have first rights to increase Los Alamos’ subscription to a maximum of 8.6 MW, given our investment cap and prior to the unsubscribed capacity being allocated to the new interested parties.” 

The CFPP is a valuable carbon free alternative, according to Shelton.  Severe drought conditions affecting hydroelectric facilities across the west, threats of wildfire, and extreme weather patterns are constraining the electric grid. This is further exacerbated with traditional dispatchable base load resources replaced with renewable “intermittent” resources, causing volatility in the electric markets. “Just recently, we found ourselves purchasing electricity on the market at $1,750 per MWh during last month’s heat wave in the West.  We want to ensure that not only is the Los Alamos County energy generation portfolio carbon neutral, but that it is reliable, diversified and not as susceptible to market volatility.” 

The current energy generation portfolio for the DPU includes renewable and fossil-fuel resources.  DPU receives renewable energy from the two county-owned hydroelectric plants, the solar array on the East Jemez landfill and local distributed generation (customers’ roof-top solar systems). It also receives renewable hydroelectric power from the Western Area Power Administration. DPU will exit its ownership agreement in the San Juan Generating Station, a coal-fired plant, in June 2022 and will replace a portion of that power with firm, New Mexico wind and solar energy resources with a Power Purchase Agreement from UNIPER. Coal-fired power that comes to the county through an entitlement with the Laramie River Station in Wyoming will expire in 2040. DPU is looking at several options, including the CFPP to replace this power.  “Replacing the county’s coal-fired power with a diverse resource mix, such as wind, solar and nuclear resources coupled with our hydroelectric power, is the right decision for Los Alamos’ future,” said Shelton. 

In 2017, the DPU contracted with PACE Global to develop an Integrated Resource Plan to assist the county in decision making as it transitions to an optimal mix of generation resources at the best cost, while considering risk, forecasted loads, transmission and grid considerations, and energy industry changes.  PACE Global reported that if the CFPP came in under $65 per MWh the project could be a viable addition to the county’s portfolio. DPU is in the process of updating this IRP with a final product by 2022 to assist the BPU and Council in determining an appropriate subscription level in the CFPP.   

For more information on the CFPP visit the county webpage at https://ladpu.com/CFPP