Two states lift long-term bans on new nuclear reactors

Minnesota and Kentucky open options to secure their long-term energy security

Winds of change are blowing for the better for nuclear energy in two states – Minnesota and Kentucky. Both states rely heavily on coal which makes what is happening all the more significant.

Coal from North Dakota that fires new power plants in Minnesota won't last forever, and could in future years become subject to an expensive carbon tax.

Legislators in Minnesota, which already has two nuclear power stations, have opened options to build more.

Similarly, Kentucky, which is a big coal state, is considering lifting its ban on new reactors linking that action to enhanced employment at the Paducah uranium enrichment plant.

The Minnesota Senate voted 50-14 to repeal the state's 17-year old moratorium. The bill now goes to the House where it is expected to pass.

In Kentucky, a bill offered by State Sen. Bob Leeper, S.34, was approved 7-3 by the Senate Natural Resources & Energy Committee. This is the fourth time Leeper has sponsored the bill and the first time he's made progress with it.

In the 1980s both states enacted bans on construction of new nuclear reactors because the federal government failed to develop a comprehensive solution to management of spent nuclear fuel.

Real the whole story exclusively at CoolHandNuke now online, a nuclear energy recruiting portal and a whole lot more.

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38th Carnival of Nuclear Energy Blogs

The first known nuclear energy blog post is chalk talk at EBR-1 in Idaho on December 21, 1951

The 38th Carnival of Nuclear Energy Blogs is up at Canadian Energy Issues.  The carnival  features blog posts from the leading U.S. nuclear bloggers and is a roundup of featured content from them.

If you want to hear the voice of the nuclear renaissance, the Carnival of Nuclear Energy Blogs is where to find it.

Past editions have been hosted at Next Big Future, NEI Nuclear Notes, ANS Nuclear Cafe, Yes Vermont Yankee, Idaho Samizdat, and several other popular nuclear energy blogs.

If you have a pro-nuclear energy blog, and would like to host an edition of the carnival, please contact Brian Wang at Next Big Future to get on the rotation.

This is a great collaborative effort that deserves your support. Please post a Tweet, a Facebook entry, or a link on your Web site or blog to support the carnival.

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Idaho judge keeps lid on AEHI spending plans

The penny stock firm that wants to build a $6 billion nuclear reactor is back in business

The improbable fortunes of Alternative Energy Holdings Inc (OTC:AEHI) took another surprising turn this week when U.S. District Court Judge Edward Lodge lifted the freeze on $7 million in assets held by the firm.

The action allows AEHI to resume operations. The company immediately issued a press release to notify stockholders and banks that for now things have returned to normal more or less.

"As I said before, the SEC was simply wrong about allegations that AEHI officials were defrauding their investors. After our evidence was laid before the judge, he agreed and made the decision to release the funds," said Richard Roth, Esq., of the Roth Law Firm, PLLC, from New York City, AEHI's attorney.

Judge Lodge required the firm to report any expenditure of more than $2,500 to the SEC. For its part, AEHI accepted the judge’s terms.

Setback for the SEC?

Attorney Roth had argued in court that the SEC failed to prove AEHI had violated federal securities laws. The regulatory agency had contended that AEHI engaged in a scheme to illegally pump up the price of its penny stock.

The SEC also alleged that CEO Don Gillispie and his VP Jennifer Ransom had used the company as a personal fund for expensive cars and other trappings of the rich and famous lifestyle.

SEC lawyer Mark Fickles said the SEC investigation into AEHI would continue. In the Feb 3 hearing he introduced copies of email messages, some four years old, in which Gillispie appears to be telling another person to purchase AEHI stock to boost the price which would attract new investors.

Fick told Judge Lodge, “What we’re alleging is a broad based scheme to defraud investors.”

The emails appear to have had no impact on the judge’s decision. They may come back to haunt Gillispie if the SEC is able to take its case to trial. Unfreezing the funds doesn’t stop the agency’s investigation. Other allegations about AEHI's business practices remain to be answered by the firm. Future dates for the firm to appear in court are on the judge's calendar.

Setback for the Snake River Alliance

The Snake River Alliance (SRA), an anti-nuclear group in Boise, had repeatedly alleged that AEHI was a scam. At one point, AEHI sued the SRA for slander, but later withdrew the suit. SRA director Andrea Shipley, who’s fiery rhetoric got the activist organization into hot water, has since left it, in an unrelated decision, to work at another nonprofit in the Boise, ID, area.

The SRA took credit for pushing the SEC to investigate AEHI. Last December SRA spokesperson and policy analyst Liz Woodruff said that "victories in our business don't come often, but this one counts." The SRA’s website does not list a news release about this week’s federal district court ruling.

Success factors scarce

Pro-nuclear groups in Idaho have told this blog they don’t have much to say when AEHI’s name comes up. The main reason is that many regard the firm’s claims it will attract investors to build a $6 billion nuclear reactor in Idaho as failing to pass the laugh test.

CEO Gillispie has repeated turned down invitations to talk to pro-nuclear business and civic groups especially those in eastern Idaho which is home to the Idaho National Laboratory.

There are multiple reasons why the case for construction of a 1,000 MW reactor in Payette, ID, doesn’t add up. There isn’t enough transmission and distribution capability, or market demand, in the region to take the output of the plant. The greenfield site has no infrastructure to support the construction activity.

Financing falls short

AEHI has gone through three investment banking firms none of which raised the billions needed to build a reactor. The second firm charged AEHI $25,000 in fees, but never delivered on its promises. The firm’s CEO subsequently pleaded guilty to charges of investment fraud.

AEHI answers questions about the lack of investor financing by saying it plans to take the project only as far as getting the NRC license and then offering it to the highest bidder. This is an untried business model. It will require $50 million to get there. AEHI’s now unfrozen assets of $7 million fall short of that number.

Even if the stock rose to $1/share, the firm would have to offer 50 million more shares adding to them to the 323 million shares outstanding. On Feb 4, the stock closed at $0.32/share. Financially, AEHI has a long way to go to achieve its objective.

Reactor design not under review at the NRC

The main argument against AEHI success in the U.S. is its insistence it can get the NRC to issue a safety evaluation for a South Korean 1,400 MW reactor in the next four years. The NRC has no schedule to review the reactor design for a U.S. license. However, the reactor is referenced in a $20 billion deal between South Korea and the United Arab Emirates. The first two units are expected to be in revenue service by the end of this decade.

All of these factors resulted in MidAmerican, a Warren Buffet company, to withdraw from a proposal to build a 1,700 MW Mitsubishi reactor in the same area in Payette county, ID. Among Buffets’ reasons, the APWR reactor was years away from being certified by the NRC and no one knew how much it would cost to build one. In Texas Luminant has proposed to build two of the Mitsubishi reactors, but the lack of a federal loan guarantee places the project on a slow track to construction even if it obtains an NRC license in the future.

Small reactor option?

Sensing the problems with size, last June AEHI tagged up with Hyperion Power to assess opportunities to develop a 25 MW fast reactor at the Payette, ID, site. So far not much has come of the deal. For its part, Hyperion appears to be focused on marketing its reactor in eastern Europe as a replacement heat source for coal-fired boilers.

The licensing path forward in the U.S. for the small modular reactor at the NRC is perilous and expensive since the agency as yet has not determined what it needs to do to review such a radical design. This huge uncertainly makes it more likely Hyperion’s initial sales efforts will be focused overseas. However, Hyperion is pursuing development of a prototype at the Savannah River site in South Carolina.

Stockholder lawsuits

AEHI has another problem, and that is multiple class action lawsuits by skeptical investors who think that where there is smoke, e.g., the SEC action, there is fire. A typical complaint alleges the same mis-deeds as those first aired by the federal government.

“The Complaint alleges that throughout the Class Period, AEHI and certain of its officers and directors engaged in a scheme to manipulate and artificially inflate the market price of AEHI stock by:”

• (1) paying stock promoters to create artificial demand in the marketplace through end of day purchases,
• (2) misrepresenting that Company officers and directors never sold any shares AEHI stock, and
• (3) misrepresenting the AEHI’s true financial condition and potential business prospects.”

While the lawyers are circling AEHI, the firm is again pursuing its objectives in Idaho and has revamped efforts to open an energy park in Pueblo, CO. There AEHI supporter Don Banner told the Pueblo Chieftain he wants to secure land for construction of a new nuclear reactor.

CEO Gillispie and VP Ransom had taken leaves of absence from their positions during the SEC freeze on AEHI’s assets. Now that the freeze is lifted, the first expense the SEC is likely to see is back pay for both executives. Whether investors will ever see a reactor built in Idaho remains an open question.

Highlights of blog coverage of AEHI

• December 2010 – SEC files fraud charges against AEHI
• December 2010 – SEC suspends trading of AEHO stock
• April 2010 – Payette approves land use
• January 2010 – KEPCO reactors not certified in US
• June 2009 – AEHI gets another banker
• June 2009 – Nuke suit stopped
• September 2008 - Idaho Statesman skeptical about AEHI
• December 2007 – AEHI claims $150 M for start up
• April 2007 – Idaho's invisible nuclear power plant

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U.K. will depend on France for nuclear revival

EdF and Areva have to get organized at home

The United Kingdom currently has 19 nuclear reactors producing just under 20 percent of the nation's electricity. All but one of the reactors has to be replaced by 2023.

Development of new coal-fired power stations isn't an option, given the challenges of global warming and the finite limitations of North Sea natural gas supplies.

The U.K. government is committed to a plan for seven new reactor sites supporting a build out of 19 GWe of nuclear power.

As many as nine 1600-MW Areva EPRs could be built in the U.K. by Electricite de France (EdF) on four of the sites. Two more sites are wide open in terms of selecting a reactor design.

To deliver this awesome capability, EdF and Areva , which are both owned by the French government, must find new ways to work together. The road to success is full of potholes caused by confusion at the highest levels of the French government on how this is supposed to take place.

Read the full details exclusively at ANS Nuclear Cafe online now.

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Talking about a sputnik moment is a mistake

The reason is you are not looking at the right country when it comes to progress with nuclear reactor technology

The New York Times reported Feb 1 that during the great recession of 2008 the nuclear renaissance in the U.S. went into hibernation. It looks like it is going to stay there for a long time.

The reason is that Congress is unlikely to agree to reform the federal loan guarantee program by expanding it and changing basis for calculating the the credit risk premium. Worse, Congress is not thinking about nuclear energy as a national priority in terms of energy security.

In the President's State of the Union message he talked about a clean energy initiative, but the rhetoric rings somewhat hollow having followed the departure of the key aide in White House who was responsible for climate change and related energy matters. A clean energy standard without a price on carbon will not mobilize the financial resources needed to shift investment to nuclear energy.

Look to China, not Russia, for game changing moves

Now the President, and Sec. of Energy Chu talk about "sputnik moments," but the analogy doesn't work. The reason is that while the Russians are selling reactors globally like they were trombones, the people who are beating the U.S. at its own game are the Chinese.

This week China announced it will launch a program to develop a thorium-fueled molten-salt nuclear reactor. Wired magazine says China is taking a crucial step towards shifting to Generation IV nuclear power as a primary energy source.

According to Wired, the project was unveiled at the annual Chinese Academy of Sciences conference in Shanghai last week. The news comes on top of recent reports that China will build at least 40 GWe of new Generation III reactors in the next ten years.

U.S. nuclear renaissance is stuck

Back in the U.S., according to the New York Times, Senator Lamar Alexander, (R-TN) has called for the U.S. to build 100 reactors in the next 20 years. He wants it to be a national priority for energy security and to limit climate-changing emissions.

The NYT reports . . .

But for now, he acknowledges, the economics are not in place. “Right now, it’s stuck,” he said of the planned nuclear revival.

Yep, that's right Lamar. We're stuck. Maybe we should call the auto club in Shanghai for a tow.

The situation is more dire

Getting back to the New York Times report, the situation is actually a lot more dire than reported by the paper. When Toshiba bought Westinghouse in 2007, it looked like a great bet with more than a dozen new reactors on the drawing boards. Since then the wheels have come off the deal in ways that no one could have anticipated when it was put together.

For instance, plans for six 1,100 MW AP1000s have been delayed or are temporarily shelved include units planned by Duke and Progress in North Carolina, South Carolina, and Florida.

The proposed merger of the two firms may revive one or more of these reactor projects due to the larger rate base of the combined firms. However, the actual closing of the merger is at least a year away. Any effort to combine nuclear projects will take even more time. You can't move reactor projects around like they were pieces on a checkers board.

Elsewhere, plans by Florida Power & Light for two more AP1000s near Miami have been pushed back by at least a decade. License applications for two AP1000s at TVA's Bellefonte plant have been mothballed in favor of completing one of the partially built units at the Scottsboro, AL, site.

Ambitious plans by Areva to build a U.S. fleet of 1,600 MW EPRs have suffered several setbacks. The most visible is the Calvert Cliffs III project which may yet be revived if new U.S. investors can be found for the project, However, a plan to build an EPR in upstate New York is in the deep freeze.

Similarly, a plan to build an EPR as a second reactor in Missouri for Ameren is just getting back on track having been derailed by the state legislature two years ago.

Detroit Edison looked at the auto industry in Michigan and began plans to build Fermi III using a GE-Hitachi ESBWR. The project was a poster child for John McCain's 2008 campaign plan on energy policy. At the time no one anticipated the great recession, which tanked the auto industry in the Midwest and took electricity demand with it,

In Texas NRG is struggling to find new investors for the expansion of the South Texas Project, The twin 1,350 MW ABWRs have the distinction of being the "first mover" in terms of filing a license application with the NRC in Fall 2007. The cities of Austin and San Antonio, who were to be the utility’s primary investors, will remain customers for the electricity from the new reactors, but they are no longer major investors.

What’s needed to revive the renaissance?

The U.S. has to get out of the business of relying exclusively on the private sector to build new nuclear reactors. In the rest of the world, the capital requirements have driven governments to create quasi-government corporations.

We have the model for one right here in the U.S., which is the Tennessee Valley Authority with its corporate HQ in Sen. Alexander’s home state.

If he wants to see 100 reactors bloom nationwide, he needs to help create a series of regional nuclear energy building authorities to partner with existing utilities to assemble capital and EPC firms to execute the national priority the President talked about in the State of the Union address. Pick an energy drink Senator, any brand, chug it down and hit the Senate floor running.

The new federal corporation needs to be off-the-books in terms of the appropriation cycle to give financial certainty to utilities who sign up for projects under its sponsorship. It should be open to institutional and individual investors who want to take a stake in nuclear energy. In short, the U.S. has to stop thinking about tinkering with loan guarantees and figure out, financially, how to really get the job done. Nothing less is acceptable.

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Skeptical about new NRC blog

Transparency is good, but making it a success requires more than just one way communication

The U.S. Nuclear Regulatory Commission has decided that having a blog is a good idea. To that end it has started publishing one at: http://public-blog.nrc-gateway.gov/

The agency said in a prepared press release that the blog will "enhance [the agency's] communication with the public and support Open Government.

According to the statement, the blog will feature posts from staff members writing about various topics of interest to the public. Moderated comments will be accepted for posting on the blog.

Social media for the government is different

The NRC faces some unique challenges to be successful with this new social media venture. Count me, for now, as skeptical this will work or work well.

First, the blog isn't a substitute for the agency's formal communications channels outbound or inbound. If you want your views related to a regulatory matter part of the record for it, use the established channels. For this reason, the agency is basically saying it has no obligation to make its employees aware of your blog comment or require them to use it as part of their official work.

Second, the blog, as a government information system, is still an "official record" of the agency's communications with the public. This means anything you post on the NRC blog as a comment is retained permanently and could find its way into uses for regulatory matters unrelated to your concern or intentions in posting the comment,

Third, just because the agency has placed the blog outside official channels doesn't mean the agency's employees aren't reading it. Be careful about any overtly enthusiastic responses. They could come back to haunt you.

For instance, if you represent Betty Jo's nuclear powered screen door company in Whitefish, MT, and you think the NRC has unfairly evaluated your technology, saying so on the blog may not earn a "happy to see you" smile the next time you're in Rockville.

Does the light bulb want to change?

“The blog is intended to build upon our extensive efforts to explain and clarify the actions, roles and responsibilities of the NRC, raise awareness about our agency and its mission, and – most importantly – give us an opportunity to hear from the public.”

What's missing from this cheerful statement is what the NRC will do with blog comments. As noted above, the blog is not an official channel for communication. What feedback will agency managers get from the blog and how will they use it?

Grass roots and anti-nuclear groups will likely see the blog as an opportunity for log rolling. In addition to sending waves of contentions for new nuclear reactors through formal channels, they'll tell their members to post comments on the blog. The poor IT staffer at the NRC in charge of comment moderation will need a big, sturdy "delete" button on the keyboard.

Also, media types who want more communication, not less, could find themselves involved with interesting conversations with agency lawyers over comments posted to the blog by the public. If the glacial pace of government decision making elsewhere is any signal, don't expect your comments to show up quickly. A real risk over this "communication thing" is that by the time an even modestly quirky comment gets approved, the audience for it may be long gone.

Sound of one hand clapping?

The NRC public affairs staff is well aware of the world of social media. A key issue is how well people besides the public affairs staff listen to what is said on the blog. That assumes the public or the commission itself take it seriously as an open forum.

If the blog turns out to be just another platform for Chairman Jaczko's anti-Yucca justifications, then it's a waste of cyberspace.

So a question is whether there will be guest blog posts from the other commissioners or even former commissioners?

Also, will commissioners, who have very busy schedules, respond to blog comments or will they assign this role to staff?

The blog represents an opportunity for transparency within the limits of the agency's legal framework. It will take leadership and ownership from the commissioners themselves to make it work. If the blog remains a creature of the PR department, it will descend into the realm of irrelevant chatter.

Unsolicited advice from one blogger to another

Here's my advice to the NRC's blogging staff.

Pay attention to conversations about your “brand” by stakeholders and critics

Produce content and populate social media channels besides the blog, e.g., Youtube.

Note: The NRC is being shredded on YouTube with satire about Jaczko's Yucca tactics.

Have clear goals and objectives, a focus on target audiences, and measure results. Be prepared to adjust the way the blog is managed and the kind of content produced for it,

Authenticity and transparency count. Answer comments and inquiries quickly.

Solicit and use feedback.

& & &

The blog can be reached directly at http://public-blog.nrc-gateway.gov or by clicking on the blog icon on the NRC website, www.nrc.gov. It can also be accessed on mobile devices such as smart phones by entering the website address in the mobile devices’ Web browser.

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