Monday, February 11, 2008

Owyhee County tells AEHI to pay up

The firm owes $50,000 and could lose its permit if it defaults [Updates 02/14/08, 02/19/08, 02/20/08]

The Idaho Statesman reports that Owyhee County officials say they are prepared to stop work on the land use permit process for a proposed nuclear plant near Bruneau because company officials have failed to pay a $50,000 fee to process the application. It seems the Virginia firm has been getting a free ride since filing its papers with the planning department last summer.

Back in July 2007 Mary Huff, the county planning administrator, told me in an interview AEHI had punted on paying its bill claiming the county didn't have a fee schedule for nuclear power plants. This is slightly ridiculous since the rural county could hardly have provided for this contingency in its subdivision rules, at least until AEHI showed up. It's like a hobo on a freight train saying he didn't buy a ticket because he couldn't find the conductor.

Huff told the Idaho Statesman Alternative Energy Holdings Inc. has failed to respond to three requests for payment. She said the county commissioners sent a letter to the company on Feb 11 that said if payment isn't received within 10 days the application for a conditional use permit would be suspended. It's not a good sign for a land use decision when the developer doesn't pay the fees.

“We’re not going to continue to hold this and beg for fees,” Huff told the newspaper. “The company needs to decide if they want to go forward with this project.”

Huff told the Idaho Statesman that in December that CEO Don Gillispie had agreed to pay $50,000 to help offset the costs of the county’s review of the company’s conditional use permit application. The company needs the permit before it proceed with the project.

In an e-mail to the Idaho Statesman, Gillispie disputed the county’s story. Now he claims he hasn't received the invoice. Maybe it is a misunderstanding, but my bet is that it comes in the form of "what is it you don't understand about paying your bills?" At least that's how Owyhee County sees it.

Update 02/14/08

Joe Weatherby is chairman of the Owyhee County Energy Task Force and is on the Owyhee County Planning and Zoning Commission. He has an OP ED in the Idaho Statesman today. Here are a couple of highlights.

* * * The nuclear power proposal by AEHI/Idaho Energy Complex/Don Gillispie for Bruneau is under the same economics as MidAmerican. If Warren Buffett can't make it work, can Don Gillispie? The Bruneau plant is not in the best interest of Owyhee County for numerous reasons, but the economics alone is enough to give you cause for much concern.

* * * AEHI's promotion of cheap power for Owyhee County farmers and ranchers does not appear to hold water in the face of logic and economic realities. This is just one of the many issues that Owyhee County citizens and AEHI stockholders should question regarding AEHI's proposal.

Update 02/19/08

AEHI pays up -- The Associated Press reports that AEHI had finally paid its bill to Owhyee County for a conditional use permit. Payment of the fee does not result in approval of the permit. It reimburses the county for the costs of the permit review.

Owhyee County officials threatened to suspend the permitting process, saying Alternate Energy Holdings Inc. had ignored repeated requests to pay the fee.

Alternate Energy CEO Don Gillispie said a check for $50,000 was sent to the county.

Update 02/20/08

Some clarification is needed especially for the people sending me hostile comments. I'm most decidedly NOT anti-nuke. It is pretty funny when someone sends an obscenity laden email that says that I am. I am skeptical of AHEI's ability to raise the funds and build a plant.

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Rod Adams said...

The economic analysis of the project changes when there are two projects in the works compared to the analysis if there is only one project under consideration.

MidAmerican's decision to stop their project improves the chances that AEHI's project - if successfully completed - will be profitable.

One thing that any student of Warren Buffett knows is that he prefers to invest in industries where there is little competition - he loves a good monopoly or dominant market share player.

Anonymous said...

A quick note on why Mr. Buffett pulled his nuclear reactor off the table in Idaho. Currently Japan Steel Works is the only company in the world than can manufacture ultra-heavy forgings, above 500 tons. They have a huge backlog, they require 30% down, and they have been increasing their prices dramatically. The reason Mr. Buffett stated wasdue to the current economics of the plant. These same economics would apply to AEHI as well.