As the state legislature examines proposals to eventually make Washington’s electricity 100 percent clean, they’re also taking a good look at emerging technology that could make that happen while also boosting the state’s manufacturing industry. A Senate bill would add small modular reactors (SMR) to the state’s clean energy strategy and exempt their manufacturing and sales from the state’s business and occupation (B&O) tax.
Sponsored by Republican Deputy Leader Sharon Brown (R-8) and cosponsored by three Republicans and one Democrat, SB 5629 is the latest proposal made by Brown addressing SMRs. In 2016, she introduced SB 6224, which managed to clear the Senate Committee on Energy, Environment & Telecommunications, but never cleared Senate Rules. In 2017, she sponsored SB 5475 creating a B&O tax exemption for SMR manufacturers; the bill passed the Senate 27-22, but was sent back from the House.
At a Feb. 6 public hearing of the Senate Environment, Energy & Technology Committee, Brown told colleagues “it’s really important that we continue to have this conversation about small modular reactors and microreactors. The wind doesn’t always blow, and the sun doesn’t always shine, so we really need to have the discussion about what we are going to do to preserve clean baseload sources of power.”
SMRs generate 300 megawatts or less, compared to traditional nuclear power plants that generate 1,000 MW or more. As their name implies, they can also be moved by truck or rail. According to the Federal Department of Energy, SMRs are a “key” part of the agency’s plan to “to develop safe, clean, and affordable nuclear power options.”
Also, Washington is the location for several manufactures such as Oregon Iron Works in Vancouver that produce SMR materials. However, Brown fears that these jobs could shift over to Oregon and Idaho. “This bill is really about keeping the intellectual property and the manufacturing jobs here in this state.”
To maintain the B&O tax exemption, qualifying businesses have to develop an apprenticeship or training program with a state college or university. The goal is to increase the number of SMR industry jobs in the state by 10 percent. If that happens, then the legislature will consider extending the exemption beyond its expiration date.
The proposal is backed by entities including the city of Richland, Washington, PUD and Energy Northwest.
“This new technology is something that we’ve been watching very carefully,” Washington Rural Electric Cooperative Association General Manager Kent Lopez told lawmakers. He added that “we need to keep our options open when it comes to the technologies.”
Also in support was Isaac Kastama with the Benton and Franklin PUDs. During his testimony, he cited a 2017 study and alternative scenarios that suggested SMRs could potentially reduce the annual incremental cost to achieve 100 percent clean electricity in the Pacific Northwest.
One of the alternative scenarios examined the cost of achieving the 100 percent standard without a reliable energy source such as natural gas or nuclear power ($18 billion), while the other scenario included innovative technology ($6.5 billion).
“While I would not categorize either of those scenarios as low cost, it did dramatically change the cost,” he added. “As we look to 100 percent clean and we consider how we’re going to get there in the most cost effective manner, it’s going to be innovation, and this is one of those technologies that offers that prospect, not just locally but also around the world.”
The bill is also backed by the Association of Washington Business. Government Affairs Director for Environmental Policy Peter Godlewski told lawmakers “as our state moves to a cleaner grid and continues to grow population-wise, our need for reliable baseload power will also continue to grow. We believe all options should be available to help meet this need.”
No further action is scheduled for SB 5629 at this time.