By Peter Kennedy
U.S. Bulletin Board company Alternate Energy Holdings Inc. (OTO: AEHI, Stock Forum) wants to build a nuclear power plant in Idaho, an ambitious plan that could cost in the neighbourhood of US$8-$10 billion, a company spokesman said.
This seems like a big stretch for a company with zero revenue and a stock price that traded at 80 cents on Wednesday, giving AEHI a market value of $260 million, based on the 320 million shares outstanding.
The fact that AEHI has embarked on its third attempt to secure a site in Idaho means that investors who paid up to $1.45 for the stock are taking a huge gamble, since there is no way of knowing whether or not the project will go ahead.
Documents filed with the U.S. Securities and Exchange Commission indicate that AEHI had only $8 million in cash and short term investments at the close of the three months ended June, 30, 2010 when it reported a loss of $1.7 million or $0.01 per share on zero revenue.
That compared to a year earlier loss of $1.2 million or $0.01 on zero revenue.
Still, AEHI says it wants to build a 3,000 megawatt nuclear power plant in rural Payette County, Idaho, on property located near the Oregon border. Payette County has a population of 21,000.
These efforts are being led by AEHI chief executive officer Don Gillispie, who has over 45 years of experience in the construction and operation of nuclear plants, the company said.
Boise, Idaho-based AEHI says the project could create 5,000 jobs during the construction phase and employment for about 1,000 when the plant is in operation.
AEHI submitted a land use application for the proposed plant about a year ago, according to Don Dressen, an Idaho administrator with Payette County’s Planning and Zoning office.
The company has chosen a 5,300-acre property located about 15 kilometres southeast of the town of Payette.
But its application to have the site rezoned for industrial use must be reviewed in a series of public hearings before the Planning and Zoning Commission makes recommendations.
Those recommendations would then go to the Board of County Commissioners for further review and additional public hearings.
It’s a process that could take about six months to complete, leaving shareholders in limbo.
“I don’t know if [the project] makes economic sense because our area has the lowest power costs in the country,’’ Dressen said.
He was referring to hydro electric power that is generated from the region’s Snake River system.
“I don’t think nuclear power can compete.’’
Even if the land use plan is approved, Dressen believes AEHI will be challenged to secure a license from the U.S. Nuclear Regulatory Commission (NRC).
An AEHI spokesman said it will cost about $50 million to create the data and file the application.
Once the application is filed, the company is anticipating a 3-year waiting period before any decision is reached.
“We definitely agree that there is risk here,’’ said John Quirk, of Crescendo Communications, a New York-based investor relations company retained by AEHI. “I don’t know of anyone who has ever done this before.’’
Aside from the land use issues, the company must grapple with the fact that the construction of nuclear reactors has virtually ground to a halt in the United States following the partial core meltdown at the Three Mile Island nuclear generating station in Pennsylvania, back in 1979.
There are currently no large nuclear power plants in Idaho.
However, the application is evidently being taken seriously, as Payette County has sent an engineer to Kansas to check out a nuclear power plant. “We want to look at the potential problems so that we can address them should we decide to build one in our neighbourhood,’’ said Dressen.
When asked to comment on skepticism expressed in The Street Sweeper and local media outlets, AEHI spokesman Dan Hamilton said opposition to the plan is driven by the Boise, Idaho-based Snake River Alliance, a non-profit organization which is opposed to the use of nuclear power.
“Recent opinion polls show that people want nuclear power,’’ Hamilton said.
But Ken Miller, an energy program director with the Snake River Alliance, took a different view.
“They blame us for their inability to build a reactor,’’ he said. “The problem rests with them, not with us.’’
Miller said the alliance is of the opinion that in the absence of Federal loan guarantees (which AEHI doesn’t have) it would be virtually impossible for Wall Street to finance a private sector nuclear reactor like the one that the company is planning to build in Idaho.
“It would be different if it was Duke Energy Corp. (NYSE: DUK, Stock Forum) or one of the big utilities,” he said.
Miller said AEHI is also hampered by the lack of available water and transmission lines in the region. “We don’t consider them to be financially viable.’’