Start-up company pursues plan for nuke plant near Bruneau
The Idaho Statesman
May 2, 2007
On a rainy day, Don Gillispie looks over a remote hay field southwest of Mountain Home.
He has a grand plan for this field. Gillispie hopes that by 2015, this farmland, with its sweeping vistas of the Owyhee Mountains, will be home to the nation’s largest nuclear power plant.
It’s an ambitious plan for the president and CEO of Virginia-based Alternative Energy Holdings, a 7-month old company with little money and stock that trades for about the cost of a candy bar.
Gillispie estimates it would take $3 billion to complete the 1,600-megawatt plant — money the company doesn’t have. Gillispie said the market capitalization of his company is about $15 million, and it has $20 million in assets — the value of the 4,000 acres of Owyhee County land.
After nearly three decades without a single new permit for a nuclear power plant, the U.S. now has a cluster of companies bidding to get the industry moving again. Ahead of Gillispie are 15 bigger companies — well-known companies like Duke Energy, Unistar and Entergy — proposing to build plants. All have much stronger balance sheets than Gillispie’s little start-up.
Those companies have started the lengthy and complicated process of obtaining permits from the Nuclear Regulatory Commission. Alternate Energy hasn’t. Gillispie says that’s because he is still trying to raise the $78 million he needs just to complete the licensing process.
Gillispie says he’s not daunted. Someday, he says, his plant will make a lot of money.
“I’m a very determined person and that’s how good things and new things get accomplished,” he said.
Industry experts say it will be a challenge, but Gillispie’s company has a shot.
To make the plant a reality, Gillispie needs investors. He has none now other than James Hilliard, who put up his land for the plant site in exchange for a stake in the company.
Alternate Energy trades on an over-the-counter market called the Pink Sheets under the symbol AEHI.PK That little-known market is for companies that don’t meet the financial requirements to trade on a larger exchange.
On Tuesday the stock closed at 50 cents a share, up 11 cents.
When it comes to financing nuclear power plants, Gillispie doesn’t think being small is a disadvantage.
“The big companies don’t have the money to build them either,” he said. “They don’t just pull out the checkbook. They find the funding in several different ways.”
He said he has an offer for a $1 billion loan but wants to first try to raise money from investors.
“I’ll be meeting with some pretty large investors, guys who can put up $50 million to $100 million at a whack,” he said. “I’ll get as many of those as I can.”
After he has enough investors, Gillispie said, he will pursue a loan and take advantage of the 2005 Energy Bill that authorizes government loan guarantees for nuclear plants.
“We concluded that we can make $2 million to $3 million a day in operating profits,” he said. “These are cash cows, and we can do that while still selling very reasonably priced power.”
Gillispie said he would give Idaho first shot at buying power from the plant and would sell the rest in Nevada and California.
Gillispie is banking on his experience in the industry — and that of his board — to encourage investors.
He has consulted and helped build plants, and he worked for companies like Duke Energy and the Tennessee Valley Authority. Gillispie is a former senior vice president of nuclear assessment programs with the Nuclear Management Co. in Hudson, Wis., which operates seven nuclear power plants.
His six board members all have backgrounds in the industry. They include James Taylor, the former chief operating officer of the U.S. Nuclear Regulatory Commission, and Ralph Beedle, a past senior vice president of the Nuclear Energy Institute, a Washington D.C.-based nuclear industry group.
Adrian Heymer, senior director of new plant deployment for the institute, said his organization hasn’t had a chance yet to meet with Alternate Energy and learn more. The company has joined the institute, he said.
Heymer said every company that wants to build nuclear plants is looking for investors, just as Alternate Energy is.
“If they (Alternate Energy) pull the right team together, they could do it,” he said.
After the Three Mile Island accident in 1979, the nuclear industry in the United States came to a virtual halt. The last nuclear plant to begin operation was the Watts Bar reactor owned by the Tennessee Valley Authority. Construction began in 1973 but operation didn’t start until 1996.
David Lochbaum, director of the nuclear safety project for the Union of Concerned Scientists, an organization critical of the industry, said the lack of any new licenses in more than 20 years has leveled the playing field for small companies like Alternate Energy to compete.
“It is a new company, and they have some experience, but that doesn’t necessarily mean success or failure,” Lochbaum said. “I think the challenges they face are the same as any company.”
Lochbaum said Gillispie’s decision to come to Idaho could be an advantage.
“Idaho has a lot of nuclear talent to draw upon and in a sense is part of Idaho’s history,” he said. “Plus there is quite a bit of acceptance for nuclear power in Idaho that you may not see in other places.”
But not everyone in Idaho is enthusiastic about Gillispie’s proposal.
Jeremy Maxand, executive director of the Snake River Alliance, a Boise-based antinuclear group, said the C.J. Strike Reservoir is too great a resource to risk putting a nuclear plant next to it.
Maxand’s said nuclear power is still dangerous, and he sees no need for the plant.
“It’s absolutely unnecessary for the state to build a nuclear power plant,” he said. “No one can deny that we are already awash in this state with energy potential in areas like wind power, biomass, geothermal and solar.”
Maxand said Alternate Energy’s proposal shows the need for a state siting authority, so the decisions on where new plants are located are not made solely at the county level.
But Gillispie said the public now accepts that nuclear is safe.
He said he supports alternative energy, too, and even proposes an adjacent plant to make ethanol using the excess heat from the nuclear plant. The plant won’t be visible from the reservoir, he added.
But before he can go any further with the project, Gillispie first needs to get a conditional- use permit from the county to change the land’s status from agriculture to industrial.
Owyhee County Commissioner Jerry Hoagland said the commission has received a brief presentation from the company. He declined to say what he thinks, saying commissioners likely will have to decide on the permit.
Gillispie said he plans a public meeting with county residents later this month to answer questions.
“I think I can say safely that senior Idaho officials are supportive of what I’m trying to do,” he said.
Jon Hanian, a spokesman for Gov. Butch Otter, said Otter believes there is a role for nuclear power in the country’s energy portfolio, but he doesn’t know enough yet about Gillispie’s proposal to take a position.
Whether or not Gillispie’s dream comes true, Mark Holbrook, an advisory engineer at the Idaho National Laboratory, said there’s no shortage of investors waiting to put money into new plants as soon as one company successfully builds one.
“Once we get past the first plant, I think we’ll see the floodgate open,” he said.
Contact reporter Ken Dey at [email protected] or 672-6757