Public Citizen Testimony Against SB 2967 — Funding for Advanced Nuclear Energy
Public Citizen Testimony Against SB 2967 -- Funding for Advanced Nuclear Energy
To: Chairman Charles Schwertner and the Members of the Senate Committee on Business & Commerce.
CC: Sen. Phil King, Sen. César Blanco, Sen. Donna Campbell, Sen. Brandon Creighton, Sen. Nathan Johnson, Sen. Lois W. Kolkhorst, Sen. José Menéndez, Sen. Mayes Middleton, Sen. Robert Nichols, Sen. Judith Zaffirini
Via hand delivery and by email.
From: Adrian Shelley, Public Citizen, ashelley@citizen.org, 512-477-1155
Re: SB 2967, funding for advanced nuclear energy – Public Citizen testimony against
Dear Chairman Schwertner and Members of the Committee:
On behalf of 30,000 members and supporters in Texas, Public Citizen appreciates the opportunity to testify against SB 2967 relating to funding mechanisms to support the siting, development, construction, and deployment of advanced nuclear and innovative energy technologies in this state. We must oppose this bill because we do not support subsidies for nuclear energy, we do not believe advanced nuclear energy will be cost competitive or deployable any time soon, and we do not believe the fund should be made available to nuclear energy projects that do not put electricity into the ERCOT market.
Tier 1 and 2 payments are available before a project generates any electricity.
SB 2967 creates two tiers of funding opportunity. Tier 1 is for “early development and siting activities” and Tier 2 is for construction. Significantly, funding is available from both tiers before a project ever produces electricity. If this bill goes forward, we recommend adding a provision that a project that ultimately does not produce electricity and sell it into the ERCOT market must reimburse any granted funds.
A loan program would be more faithful to the Texas Energy Fund.
By analogy to the Texas Energy Fund, Tier 1 and 2 payments should be loans, not grants. The Texas Energy Fund only gives grants in the completion bonus grants phase, and only after a project has provided power in the ERCOT region. Utilities Code Sec. 32.0105. Furthermore, the completion bonus grant program has deadlines of June 1, 2026 and June 1, 2029. It would be virtually impossible for advanced nuclear energy projects to meet similar deadlines, and indeed this is one reason we oppose any state funding for advanced nuclear energy. But if a fund does go forward, it too should have deadlines for eligibility.
The Texas Energy Fund gives loans, not grants, for the construction phase of projects. If this proposal goes forward, then Tier 1 and 2 payments should be loans with a specified repayment schedule.
There is no requirement that qualifying projects provide power to ERCOT.
The Texas Energy Fund is limited to projects that provide power to the ERCOT region. The completion bonus grant program states that, “The amount of a grant under this section must be based on the megawatts of capacity provided to the ERCOT power region by the facility.” Utilities Code Sec. 34.0105(b).
The Texas Energy Fund also clearly states:
The commission may not provide a loan or a grant under this chapter: (1) for a facility that will be used primarily to serve an industrial load or private use network; Utilities Code Sec. 34.0106(b).
SB 2967 has no such restriction. Indeed it says nothing at all about when or whether a funded project has to generate electricity at all, to say nothing of providing electricity to the ERCOT market. This means that a new advanced nuclear project that served a large data center (for example) behind the meter would still be eligible for payments.
SB 2967 is therefore not designed to provide additional power to the ERCOT grid, but simply to promote the existence of advanced nuclear energy projects, whatever load they serve.
Advanced nuclear energy projects are too expensive to succeed in the ERCOTR power market.
One of the great successes of ERCOT is the affordability that diversifying the power grid has provided to Texas consumers. Texas has some of the cheapest power in the nation at an average of 10.04 cents/kWh ($100.40/MWh).1 Advanced nuclear energy projects are not cost competitive with wind, solar, and even gas and battery storage.
In Georgia, the Vogtle Nuclear Energy Project opened in 2023 seven years behind schedule with $17 billion in cost overruns.2 Ultimately it cost $35 billion to bring 1114 MW of power online, or $31.4 million per megawatt. Customers are expected to pay $150 per megawatt-hour, 50% more than Texans pay.3
The only publicly traded company in the United States trying to build small modular reactors (SMRs) is NuScale. NuScale cancelled six SMRs proposals in Idaho after cost overruns of 250%.4 By the time it was cancelled, the project was projected to cost $9.3 billion for 462 MW of power—$20 million per megawatt.5
NuScale also recently abandoned the Utah Associated Municipal Power Systems project due to financial challenges.6 Even optimistic projections had the project generating electricity for $4.2 million per megawatt. That ultimately proved too optimistic, as the project was cancelled due to inflating cost projects.
A Tennessee Valley Authority project near Oak Ridge is projected to cost $5.4 billion for a 300 MW plant—$17,949,000 per megawatt.7
By contrast, wind energy could be installed for $1,391,000 per megawatt in 2019.8
Nuclear is simply not cost competitive with wind and solar, even with solar farms are paired with battery storage to add dispatchability. The financial firm Lazard gave the following unsubsidized levelized costs for energy in June 2024:9
- Onshore wind: $27-73 per MWh.
- Solar plus storage: $60 – 210 per MWh.
- Nuclear: $142 – 222 per MWh.
Small modular reactors do not solve the problem of radioactive waste.
Small modular reactors (SMRs) would generate less than 300 MW of electricity and be around one tenth the size of a traditional nuclear reactor. Claims have been made that SMRs will generate less or even no radioactive waste. But a 2022 article published in Proceedings of the National Academy of Sciences found the opposite.10 As the study’s lead author explained it, an SMR could generate nuclear waste at two to thirty times the rate of a large nuclear reactor.11
This is especially concerning considering that (1) the United States currently has no solution to the problem of accumulating high-level radioactive waste and (2) the Waste Control Specialists site in Andrews County, TX could become the default dumping ground for this waste if an ill-advised interim storage proposal is approved.12 We appreciate the legislature’s effort last session to ban the interim storage of high-level radioactive waste in Texas. But the U.S Supreme Court will decide a case this year that could nevertheless lead to interim storage of high-level nuclear waste in Texas.13
We ask you to oppose SB 2967 to keep state funding out of advanced nuclear energy.
In conclusion, we ask you not to vote SB 2967 out of this committee for the following reasons:
- Advanced nuclear reactors are too expensive to succeed in the ERCOT market.
- Advanced nuclear technologies are too far away from reality to be useful to Texas even in the next 5-10 years.
- The bill is a departure from the Texas Energy Fund in that it:
- Grants—rather than loans—money for development and construction.
- Includes no guarantee that energy will actually be produced.
- Does not require funded projects to provide electricity to the ERCOT market.
- Advanced nuclear reactors could produce disproportionate amounts of radioactive waste for which there is still no disposal solution.