Utilities are increasingly targeting small modular nuclear reactors to meet the reliability requirements of deep-pocketed tech companies and defense customers.

Deep-pocketed technology companies and mission-critical defense customers are emerging as the earliest adopters of advanced nuclear reactors. While utilities see potential in the technology, their participation hinges on resolving cost-recovery challenges. Developers are marketing small modular reactors (SMRs) and microreactors as firm, low-carbon power sources for an increasingly strained grid. However, early commercial deployments are being driven less by traditional utility procurement and more by hyperscalers and other large energy consumers willing to underwrite new projects. Recent agreements are coalescing around a three-party model involving developers, utilities, and large energy customers. This structure allows utilities to integrate the power without financing or owning first-of-a-kind reactors, while large customers provide demand and help absorb development risk.

Candice Yu, director of business development at Kairos Power, outlined this strategy at the inaugural Los Alamos Nuclear Forum on August 25. Hosted by the New Mexico Nuclear Alliance—a trade group founded in July by registered lobbyist Scott Lopez to promote nuclear power—the event convened developers, utility executives, and national laboratory experts as the industry shifts from zero-power criticality testing toward commercial deployment. Yu noted that a wave of nuclear agreements involving Google, Amazon, and Microsoft over recent years has marked a market inflection point. For instance, Kairos’ 2024 agreement with Google targets up to 500 MW by 2035. She characterized the arrangement as an “order book” rather than a single-plant project, designed to enable standardized designs, repeated construction, and fleet-wide cost reductions. “The utilities who will benefit the most are the ones who are willing to find innovative contracting solutions and have the ability to find the right site for nuclear generation, and also just [the] ability to work quickly,” Yu told Utility Dive.

Despite these advances, experts warn that utilities face a more fundamental constraint: the grid may not be ready to accommodate new generation at the required pace. “We need a bigger grid,” said Lynn Mostoller, executive director of the New Mexico Renewable Energy Transmission Authority, noting that the West’s fragmented power system and lengthy interconnection timelines could delay advanced nuclear deployment. “You’re already too late for five years out because those resources are already in the RFP process,” Mostoller said during a panel discussion. “If you’re not in that mix, you’re going to miss the boat … [in the western U.S.] we're probably looking at the 2040 range to be putting more nuclear onto the large utility system.”

At the same event, Kit Carson Electric Cooperative CEO Luis Reyes shared that his rural cooperative is evaluating localized generation, microgrids, batteries, and behind-the-meter resources as transmission constraints make new power lines difficult and slow to construct. Although many of his members identify as “anti-nuclear, pro-solar,” Reyes emphasized that nuclear power must remain “on the table” as a low-carbon option and a potential long-duration resiliency resource during wildfire-related public safety power shutoffs.

The Los Alamos County Department of Public Utilities, which serves the national laboratory and other federal facilities, is currently evaluating 5-MW to 20-MW microreactors paired with long-duration energy storage to meet future power demands, according to Ben Olbrich, the county’s deputy utility manager for power supply. Locally sited nuclear plants could deliver dependable power when solar generation is unavailable while reducing reliance on new transmission infrastructure. Olbrich argued that this reliability premium could make nuclear competitive even at prices exceeding established resources. “If [SMRs] come along and they’re $120 a megawatt-hour equivalent, that’s still comparable to what we’re seeing now for natural gas units, if you can get them in the next few years,” Olbrich said in an interview.

Meanwhile, Matt Griffin, head of nuclear affairs at Antares Nuclear, announced that the company is targeting Joint Base San Antonio for its first commercial deployment. The announcement follows a recent criticality milestone and the company’s selection that same week for the U.S. Department of Energy’s Nuclear Energy Launch Pad. Antares was also chosen by the U.S. Army and Air Force to construct microreactors at military installations under a Defense Innovation Unit pilot program. According to Griffin, advancing advanced nuclear siting will require blended public-private capital, national laboratory partnerships, and shared risk with the government. “The real bottleneck isn’t the reactor — it’s the supply chain: fuels, precision components and transport — and until we fix that, you can’t turn prototypes into power on the grid,” Griffin said.

Griffin was joined on a panel by Chris Stanek, director of nuclear energy programs at Los Alamos National Laboratory, and Stephanie Booth, R&D manager for Sandia National Laboratories’ Advanced Nuclear Fuel Cycle Technologies program. They discussed the inefficiencies of early reactor designs, which Griffin described as “most inefficient,” and highlighted ongoing efforts to develop fuel configurations that reduce the volume and complexity of future waste streams. Radioactive waste concerns have sparked debate over nuclear’s classification as clean energy and triggered community pushback against potential host sites. In response, the Department of Energy under the Trump administration has launched a new initiative to persuade states that storing and recycling nuclear waste could anchor broader investments in “nuclear lifecycle innovation campuses.”

Ultimately, the path forward for utilities depends on state policymakers. Although the Nuclear Regulatory Commission regulates nuclear facilities at the federal level, utility resource planning and site selection typically require state and local approval. During the 2026 legislative session, the New Mexico Nuclear Alliance unsuccessfully advocated for legislation that would have classified nuclear energy as a renewable resource under the state’s Renewable Portfolio Standard. Conversely, Utah incorporated nuclear into its clean-energy credit framework in 2024. Before utilities can seriously pursue nuclear projects, however, states must establish enabling legal frameworks, Reyes noted. “The first [step is] the legislature, the governor who’s sitting, needs to acknowledge that if we’re really going to get to this low, no-carbon world, [nuclear] has to be in statute so utilities can look at this,” he said.