SALT LAKE CITY -- State Engineer Kent Jones is setting the stage for Utah's first nuclear power plant to seek federal approvals.
Jones rejected an appeal Tuesday from environmental groups that questioned the developer's ability to raise money for a multibillion-dollar power plant near the Green River.
Jones acknowledged the first investors sought by Blue Castle Holdings have been dropped but that the developers can probably find other backers.
"We have reason to believe they could pull that money together and construct the works," he told The Associated Press.
Jones granted a water right for the plant last month but reconsidered his decision with the appeal on the financial question by the Sierra Club, Healthy Environment Alliance of Utah and Moab-based Uranium Watch.
He wasn't required to inspect Blue Castle's books or the project's likely success in the financial markets, but found it probable that the developers could find investors if the project moves ahead.
Jones said he can always reverse the water-right transfer if the project fails.
His final ruling clears the way for Blue Castle to seek approval from the Nuclear Regulatory Commission -- a review that can take years and millions of dollars for studies.
"They have asserted they are gathering funds from investors and they have done quite a bit of work to get to this point," Kent said Tuesday. "They just have to go out and get investors. There are some concerns with that, but based on what they've done in the past I believe they have the ability to obtain funds and construct the proposed works."
He added, "A project of this scope takes a lot of money."
In Tuesday's ruling, Jones acknowledged that his first decision in January incorrectly stated that Blue Castle had tentative agreements to sell electricity to 17 utilities. Jones, however, said his original decision didn't hinge on that mischaracterization and that it wasn't relevant.
"My opinion remains unaltered," he wrote.
Kane and San Juan counties have agreed to lease water rights for the nuclear plant. It amounts to 53,600 acre-feet of water a year from the Green River, a major tributary of the Colorado River. That's enough to serve about 100,000 households.
Opponents decried Jones' rulings by saying it would harm endangered fish, use a significant amount of scarce water on the arid Colorado Plateau and threaten recreational opportunities.
"The lack of scrutiny the Herbert administration has shown towards this nuclear reactor scheme is inexcusable," said Matt Pacenza of HEAL Utah. ""We're appalled that the State Engineer has so brazenly ignored law and precedent in his willingness to advance Governor Herbert's dirty and dangerous energy agenda."
The 3,000-megawatt power plant would sit near the intersection of Interstate 70 and State Road 6 about six miles west of the Green River.