Idaho Energy Update June 11, 2008: Questions Abound for Elmore Nuke Plant Developer
June 11, 2008
After leaving Owyhee County amid controversy two months ago, Alternate Energy Holdings on Tuesday peddled its as-yet-unfunded nuclear power plant proposal to nearby Elmore County, rolling out another factually challenged presentation that underscored the company’s uphill fight to convince residents to accept its energy scheme.
In his first Elmore County public appearance to explain his project since announcing in April that he was abandoning Owyhee County as home to his nuke plant, AEHI President Don Gillispie tried to woo a crowd of about 60 residents, many from Elmore County and sitting in the bleachers at the Mountain Home Junior High School gymnasium. After a lengthy PowerPoint presentation extolling the virtues of nuclear power and his project, Gillispie and his emcee, Boise City Councilman Jim Tibbs, limited questions to those from Elmore County. At one point late in the questioning, the man who wants to drop a nuclear power plant a mile from the Snake River told the crowd: “We don’t have to do this. I’m not required to hold this meeting.”
Despite the choreography, AEHI faced questions from local residents concerned about the environmental, economic, and other impacts the company’s proposed 1,600MW nuclear power plant might have on the mostly rural county. The proposed site is about 15 miles upstream on Idaho’s precious Snake River from the previous site at C.J. Strike Reservoir. It’s also less than 70 miles from Boise to the west and Twin Falls and other Magic Valley communities to the east.
Questions ranged from how AEHI plans to finance the power plant to the geologic stability of the new plant site to the fate of the radioactive waste it would produce to the likely purchasers of the nuclear power and how the plant will impact life in Elmore County. Or as one resident whose farm lies just west of the site put it: “I personally don’t think it has a chance of going through,” and who then told his neighbors, “It’s going to change everything that you know about Elmore County.”
Here’s a breakdown of some of the key issues in Gillispie’s monologue and in the truncated Q&A session that followed:
If Warren Buffett Couldn’t Build an Idaho Nuke Plant, How Can AEHI?
After a highly publicized entry into Idaho with a nuclear power plant proposal outside of Payette in late 2007, investment guru and head of Berkeshire Hathaway Warren Buffett announced his MidAmerican Nuclear Energy 6 weeks later said the idea had been scrapped.
“Warren Buffett has never built a plant and neither has his utility,” Gillispie said Tuesday (his online biography doesn’t indicate he’s built one, either, although he claimed Tuesday that “I’ve built a number of nuke plants.”).
“I think they kind of got cold feet; cost was one aspect,” Gillispie said dismissively of the most famous investor in the United States. “They thought it might be an easy way to make a buck.”
So Warren Buffett couldn’t make a nuke plant pencil out, but AEHI with six-figure assets can?
Who Will Buy the Power?
No one knows. Gillispie said Tuesday his plant will generate about two-thirds of Idaho’s electrical needs, but the chances of that happening are nonexistent for several reasons. First, Idaho utilities already have generation – Idaho Power relies on hydropower for about half its generation and coal for most of the rest. It’s unlikely the dams will be decommissioned for generations; the coal plants for more than a decade and beyond.
Furthermore, despite AEHI’s oft-repeated claims of nuclear power at 1.7 cents a kilowatt hour, that number is not what the power would be sold for. Far from it. Add in the cost of building the plant (investors would expect to get their money back), the costs of decommissioning it, and other costs, the number leaps to well over 10 cents and likely much higher. That may make AEHI’s power possibly attractive in markets with steep electric rates, but certainly not in Idaho, despite Gillispie’s claims on Tuesday that, “We can build this plant and be competitive with any source in the state.” As a private merchant plant, AEHI will sell to the highest bidder, and Idaho utilities will not likely be among them. Besides, the true costs of nuclear power will be higher than renewables and most other energy resources. Nuclear power is already priced out of the Idaho energy market.
Why Elmore County?
The answer changes depending on to whom AEHI is talking.
“The land wasn’t suitable,” said Gillispie, who just three months earlier penned an op-ed in The Idaho Statesman in which he praised the old site as “the perfect place for a reactor.” In a May 30 letter to Owyhee County officials, he said, “Because of the problematic nature of the location, the site would not likely be approved by the Nuclear Regulatory Commission.”
So maybe it was geology, except Gillispie also told the Elmore County crowd that he liked his new site because he could ship the reactor and other materials and equipment to the site without having to build a bridge or use a barge to ship across the Snake River. So maybe it was problems with navigating the river.
“The biggest thing is access to rail, and the road access is excellent,” he said, offering up yet another reason for fleeing from “the perfect site.”
Gillispie also said his new site “looks very stable” from a seismic standpoint, despite its being just 15 miles from a site rejected auspiciously for that very reason, and despite nearby towns such as Twin Falls being rattled from the Wells, NV., earthquake earlier this year.
He also said it’s close to the proposed Southwest Intertie Project (SWIP) transmission line, which actually is projected to pass through the Magic Valley more than 50 miles to the east. That’s an important consideration, since AEHI faces monumentally expensive transmission hurdles if it wants to move its power out of Elmore County.
AEHI is confident local residents will embrace its nuclear plant, if for no other reason than the economic benefits the company says it will deliver.
“The people who oppose it, most of the ones I’ve met are transplants,” Gillispie told a crowd that included a number of Idaho natives who oppose his plant.
What About the Waste, Radiation, and Other Emissions?
Gillispie said a new technology “could” allow the reprocessing of spent fuel rods, but failed to mention such a technology has been developed in the United States and won’t be anytime soon. The notorious Global Nuclear Energy Partnership (GNEP) to reprocess spent fuel is floundering, so for the foreseeable future all the waste generated at U.S. commercial power plants will stay where it’s generated. The Department of Energy’s proposed Yucca Mountain spent fuel repository in Nevada will likely never open, and even if it did, it’s spoken for.
While Gillispie described a nuclear power plant as nearly emissions-free, the fact is it would pose huge cradle-to-grave environmental challenges. From Uranium mining, milling, enrichment, fuel production, power production and its massive was problem, nuclear power is the most dangerous and toxic form of electricity generation currently used for commercial power.
What About Light Pollution and Bruneau State Park?
One questioner asked how the proposed power plant would affect nearby Bruneau Dunes State Park, and just as important the invaluable observatory at the park. “Your facility is going to be very close to Bruneau State Park,” the questioner said, noting light pollution from an industrial site could seriously damage the observatory’s ability to see at night.
Gillispie admitted he hasn’t visited the state park that’s almost next-door to his power plant site, but sought to assure residents he’ll point his lights downward to minimize impacts from the lights.
“Do you have any idea how close you’ll be to Bruneau Dunes?” the questioner persisted.
“I don’t off the top of my head,” was the reply.
Who’s Paying For the Plant?
Gillispie told residents “There are quite a number of stockholders in this area,” although in AEHI’s most recent unaudited financial report, covering the year 2007, there were 247 shareholders of common stock on record holding a total of 42.7 million shares (keep in mind the stock’s price on Wednesday was 16 cents a share).
On Tuesday, Gillispie said initial funding “should be secured probably this month or the third quarter at the latest.” He’s been hoping for a big outside investment for some time. Last December, AEHI issued a news release claiming to have secured $150 million from Salt Lake-based Silver Leaf Capital, but nothing more has surfaced on that. Earlier, AEHI said it had a $3.5 billion commitment from New York-based Cobblestone Financial Group, a firm that specializes in such things as small commercial investments. No further word on that, either.
So far, AEHI is bumping along on investors willing to plunk down the 16 cents a share or so for its stock. And while AEHI continues to claim its project will cost $4 billion to $5 billion, similar plants elsewhere are undergoing sticker shock, with costs doubling and tripling to more than $14 billion.
Also, recall that Owyhee County officials had to send multiple e-mails to AEHI to get the company to cough up the $50,000 it promised to help offset the huge costs of processing its county permit applications. Elmore County would be well-advised to make sure it gets such funds well before it spends scarce taxpayer dollars to process its applications.
Asked by one questioner Tuesday whether AEHI planned to take advantage of a new state law that would cap property valuations at $400 million for companies that invest $1 billion or more in Idaho, Gillispie said, incredibly: “I haven’t done my homework on that one.” That’s an even odder comment given that the company the Legislature tailored the tax giveaway for – French-controlled Areva, which hopes to build a uranium enrichment plant outside Idaho Falls – is the same company Gillispie identified as the likely vendor for his nuclear reactor at the Elmore site.
The company’s most recent unaudited financial filing, dated June 10 and covering the year ended Dec. 31, 2007, shows total assets of $324,000, a net loss from operations of $4.4 million, and 42.7 million shares of outstanding stock (currently valued at 16 cents a share). That financial statement can be found in the “filings” section at: http://www.pinksheets.com/pink/quote/quote.jsp?symbol=AEHI#getQuote
NOTE:
AEHI has scheduled a second meeting for 7 p.m. to 8:30 p.m. Monday, June 16, at the Glenns Ferry Opera House.