1. I liked this company too and was on their mailing list. The affidavit response from Gillispie, however does show that he was involved with some transactions that, even if they were clean, were probably unwise for someone in his position. This is particularly true if you have made the fecal roster of people like the Snake River Alliance, who don’t fight fair at the best of times.

    1. Yes, probably unwise, and his inquiry to the law firm shows that there was some doubt about the nature of the transaction. I guess my take away is that unless you are perfect, not just legal but so above board for 10 to 15 years that no one can find or manufacture a fault, you cannot enter the nuclear power business. Even Daniel had a legal problem when the opposition could make his praying illegal.
      SEC = Guilty until proven innocent. Stop business first and then defend yourself. blah. An investigation before the freezing of assets would have been just too much work for the SEC.

  2. Thanks Rod for citing my prior coverage of AEHI and also Dale Klein’s warning about the nature of the nuclear industry – it is no place for amateurs.
    Although I am a pro-nuclear blogger, my coverage of AEHI has shown that it fails the “baloney test.” In my view the firm is not credible in its representation that it has the capabilities and funding to build a nuclear power plant in Idaho, Colorado, or anywhere else. AEHI fails to meet the criteria I laid out more than three years ago (URL below) .
    By comparison, NRG’s work at the South Texas Project to build two 1,350 MW ABWR reactors does meet the criteria. Here’s the list.
    * Public identification of investors, markets, and suppliers
    * Reactor design is already approved by the NRC
    * Filed a complete COL application with the NRC
    * Co-located with existing reactors to take advantage of existing infrastructure
    * Construction firms and suppliers have track records building nuclear power plants
    * Arrangements with manufacturers of large forgings to get them on time and within budget
    * Deals to sell electricity on an existing grid to committed customers
    * Experience in the nuclear energy industry running nuclear reactors
    Also, with regard to AEHI’s actions in Idaho, the firm declined repeated invitations to make its case to the pro-nuclear community there. As a result, the firm’s extraordinary claims, and indefensible plans, for a new reactor became a source of embarassment for nuclear energy advocates. It also made the firm a sitting duck for attacks by anti-nuclear groups.
    There is no law against stupidity. The SEC won’t be able to gain a conviction on those grounds. While AEHI is presumed innocent until proven guilty under the law, the regulatory agency’s actions have reoriented public perceptions of its chances for success.
    The AEHI case with the SEC is now one for the courts to determine whether the firm violated U.S. securities laws. This is now a financial story. It is no longer a nuclear story.

    1. Dan – I respect your opinion. The problem I see with your criteria, however, is that they leave no room for anyone who is not already an established nuclear plant operating company. That would not be an enormous problem except for the fact that none of the established nuclear plant operating companies has succeeded in building anything new in a very long time. For a variety of reasons, they are terrific operators and lousy visionaries.
      Again, I allow for the fact that Gillispie’s plans may be completely unworkable, but there is a lot that can be done AFTER successfully attracting capital. Most of the expertise and experience required for success in the nuclear business is available for hire for an enterprise that not only has the money, but also has the determination to make it happen.
      An often cited case was the fact that Warren Buffett decided against an Idaho nuclear project. However, Buffett also decided that it would be great investment to purchase a railroad whose main business is hauling Wyoming coal. From my point of view, there just might be a relationship between the fact that Buffett very publicly rejected nuclear while putting his money into an enterprise that will profit mightily if nuclear does not grow.

      1. Buffett pulled out of the Payette, ID, site for several reasons. (1) the greenfield location lacked infrastructure to support construction of a 1700 MW nuclear power station and a grid capable of delivering electricity from the reactor to customers; (2) the Mitsubishi reactor design did not have an NRC design certification and no one knew what it would cost to build one.
        Also, Buffett tried to buy a major stake on Constellation’s Calvert Cliffs III reactor project, but was out bid for it by EDF. His stake in the railroads makes sense in terms of freight traffic in general and not just coal mining output hauled to major electric power utilities.

    2. @Dan – one more thing – what is the current status of NRG’s plan to build two additional units? Do you still consider the project a home run, was the impressive initial connection ruled a ground rule double that requires someone like the DOE to connect for a hit in order to put on run on the board?

      1. NRG has acquired early stage financing, ahead of issuance of an NRC license, from Tokyo Electric Power Co (TEPCO) and loan guarantees for some of its financing from the Japanese Export Bank due to the fact the ABWR reactors are being supplied by Hitachi and built by Toshiba. DOE’s loan guarantee would cover the remaining investors up to 80% of the loan value.
        The cost of the project has gone up. The City of Austin, TX, backed out of being an investor, but will remain a customer. The City of San Antonio dropped its investment stake from 40% to 8%, but will also be a customer. In particular, San Antonio is worried about volatility in future natural gas prices.
        NRG’s STP project still looks like it has legs. Award of a DOE loan guarantee will certainly help. NRC licences for the twin reactors are likely to be a confidence builder for additional investors.

        1. The best way I can think of to fail building a nuke is going head to heat with Powder River Basin coal.

          1. @Kit – you are probably right about that, especially when you are right in PRB’s wheelhouse and need very little rail based transportation.
            However, it is interesting to note that there was not one single coal fired power plant started in either 2009 or 2010 in the United States. Low fuel cost under today’s rules is apparently not the only decision metric being used.

    3. “* Co-located with existing reactors to take advantage of existing infrastructure ”
      Wouldn’t locating new nuclear reactors at old coal generator sites be at least as good? The powerlines, cooling water availability & transport infrastructure would save costs.

    4. Dan,
      I have great respect for your blog and the information you provide. However, I would ask, if a greenfield project could ever be started in the USA with the criteria you have laid out. When we finally start building SMR’s how will we site them? Will only existing players get to be involved or could I start a company that could be involved in selling them to various markets?
      I read your list and I guess I just disagree with it. Risk and Baloney are not the same thing. You eliminate all risk with your list.

  3. One always appreciates a David and Goliath story. A “little engine that could” so to speak. Not only did Gillispie exploit the desire of well wishers of that ilk but also ever other human frailty. This has never been a nuclear story but a story about penny stock fraud. How to do it! Gillispie’s mode of operation has always to rely on ignorance and greed. So long as there are humans there will be people like Gillispie willing to part those people from their hard earned money.

    1. There is a huge difference between a scam and a potential. When you are competing with one of the largest income producing industries in the world – energy generation – you have a huge potential. A scam would be indicated if,
      1. The person doing the work had NO credentials in the area.
      2. There was no significant progress or work towards the stated goal.
      3. The concept of risk was minimized or covered over.
      In this case, I see a legit business man raising capital rather than simply borrowing money. This is exactly the way that a market capital business is expected to operate. I don’t see “greed” but opportunity. The message I am getting from the SEC lawsuit is – don’t start a large business unless you already are a large business.

  4. I find it amazing that the SEC can file a case in court and freeze the assets of a company without even talking to them. That is scary. I guess, I wonder how a business is ever going to start a new nuclear power plant without raising new capital. If this qualifies for illegal activity I am amazed.

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