Last week, NuScale and the Utah Associated Municipal Power Systems (UAMPS) announced the cancellation of their planned Small Modular Reactor (SMR) power plant because of insufficient subscribers for the plant’s electricity.

Unfortunately, this announcement was not unexpected. In 2021, Taxpayers for Common Sense (TCS) published Doubling Down: Taxpayers’ Losing Bet on NuScale and Small Modular Reactors. The planned NuScale SMR power plant, known as the Carbon Free Power Project (CFPP), was already struggling to secure subscribers. Without full subscription for the electricity produced, NuScale and UAMPS could not secure private financing. NuScale Power and its Power Module design were given special focus in Doubling Down as they received the lion’s share of taxpayer subsidies allocated to SMRs and were the only company nearing commercialization in the short term. NuScale received approximately $520 million of the $1.2 billion the Department of Energy (DOE) has spent on SMRs, and was poised to receive an additional $1.4 billion to deploy the first SMR power plant with its utility partner UAMPS before the project’s cancellation. During the project’s 2020 offramp, a period when UAMPS members who have subscribed to the plant’s electricity could opt out or remain in the CFPP without financial consequences, 8 members withdrew and 24 reduced their share entitlement. The subscribers who dropped out cited cost as their main concern, as small cities cannot afford to be locked into a project with potential billion-dollar cost overruns. As more members abandoned the project, the cost share burden for the remaining members increased. In 2021, NuScale and UAMPS announced that CFPP would be downsized from a 12-module, 720 MWe plant to a 6-module, 462 MWe plant, raising the original target power price of CFPP from $55/MWh to $58/MWh. Despite the lower overall output, achieving full subscription did not become easier. After the project downsize, UAMPS members had only signed up for 103MW, or just 22.3% of the plant’s capacity.

However, CFPP faced another major hurdle in January 2023, when NuScale and UAMPS announced that their new cost estimate was $89/MWh, a 58% increase from the previous price target. This jump in costs significantly impacted the ratepayers’ expenses. The increase even included the $1.4 billion subsidy the project was slated to receive from DOE as well as a $30/MWh tax credit included in the 2022 Inflation Reduction Act. Without these subsidies, the price target would have been much higher—around $120/MWh.

SMRs are often touted by the nuclear industry and policymakers as a cost-effective solution for nuclear energy. Yet, these recent developments underscore the high risk and costs that plague nuclear reactors. Like their larger conventional counterparts, SMRs struggle to succeed despite layers of federal subsidies.

TCS’s report estimated that DOE has spent more than $1.2 billion on SMRs, from SMR Research and Development to Licensing and Technical Support. The DOE is planning to commit at least $5.5 billion more to develop and demonstrate SMR designs over the next decade.

The cost increases, delays, and ultimate cancellation of CFPP mirror the experiences of other nuclear reactors like VC Summer, which was cancelled in 2017. Even for the Vogtle reactor that recently came online, the project was five years behind schedule and billions over budget. The current and new incentives have failed to yield a positive result for taxpayers. The continuation of nuclear subsidies costs taxpayers and may crowd out other faster, more affordable, and lower-risk options.