Ed. note: Nuclear Power is a much talked about technology in the current climate debate. Electricity veteran Ken Maize of Quad Report provides an update on three current nuclear issues: a new, mysterious NuScale power agreement; Plant Vogtle legal restitution; and the recommissioned 805-MW Palisades plant in Michigan.
NuScale’s Mystery Deal
NuScale Power has landed a deal with privately-owned blockchain data center developer Standard Power to provide two planned data centers in Pennsylvania and Ohio, 924-MW each, with electricity from arrays of NuScale’s 77-MW VOYGR small modular reactors, 12 for each data center. NuScale’s partner ENTRA1 Energy has the exclusive rights to develop, manage, own and operate energy production plants powered by NuScale’s SMRs.
NuScale (founded 2007) and ENTRA1 created an exclusive global partnership in 2022 to commercialize NuScale’s small modular reactors (SMRs). Standard Power describes itself as providing “blockchain miners focused on Bitcoin and other Proof of Work algorithm cryptocurrency mining an industrial scale infrastructure as a Service platform. The company provides infrastructure as a service with industrial-grade electrical and data center designs, as well as site selection based on low power costs and low environmental impact.” The company’s only identified site is 125 acres in Coshocton, Ohio, about equidistant between Columbus and Pittsburgh, Pa.
The announcement of the nascent deal produced a substantial bump in NuScale’s stock, which has been hammered for many months. The company’s 52-week high was $12.36/share. In 2022, NuScale used a “special purpose acquisition company” (SPAC) to divorce itself from Fluor Corp. NuScale’s shares (symbol: SMR) opened on the New York Stock Exchange on Friday at $4.96, up marginally from its 52-week low of $4.91. It closed on Friday at $5.76, a 23% jump.
NuScale’s press release is filled with lots of business rhetoric and standard industry buzz words: clean power, proven technology, innovative design, and so forth. But there is little detail and considerable obfuscation. The Motley Fool investment website commented, “This contract is probably worth a lot to NuScale — but how much it’s worth remains a mystery.”
No financial details are provided in the press release, nor in the company’s Oct. 6 8K filings at the Securities and Exchange Commission. Nor are there any timelines for the deal. The Motley Fool observed, “This being the case, it’s hard to say precisely what effect the contract will have on NuScale’s bottom line — or how long it will take to show up on that bottom line.” To date, NuScale has no significant earnings.
Also, NuScale has no track record. Its other deal, with Utah Associated Municipal Power Systems (UAMPS), is long delayed and losing steam. The multiple-reactor project was originally planned to be in service in 2009.
Finally, the press releases state that NuScale’s technology is the only SMR that has Nuclear Regulatory Commission design approval. True but misleading: NuScale’s 50-MW design had NRC approval. In 2020, NuScale upped its reactor design to 77 MW. In March, the NRC announced a review of the changed design, stalling the prior approval. NuScale and ENTRA1 can’t apply for a license to build and operate the reactors until that review allows.
Vogtle #3/#4 Restitution
Southern Co.’s Georgia Power will pay public power system Oglethorpe Power Corp. $413 million to settle a lawsuit over cost escalation at the $35 billion, two-unit new Vogtle nuclear power expansion. Oglethorpe, a generation and transmission cooperative, owns 30% of the 2,000-MW Vogtle project.
As part of its ownership agreement, Georgia Power agreed to limit Oglethorpe’s exposure to cost overruns for the construction of the two 1,000-MW Westinghouse AP1000 pressurized water reactors. The costs of the project ballooned, more than doubling from the initial estimate of $15 billion for the two units.
Georgia Power and Oglethorpe disagreed on how much the investor-owned utility owed in refunds to the public power system. Oglethorpe sued in July 2022, seeking $695 million. The settlement last week (Oct. 6) will award Oglethorpe $308 million for already incurred cost overruns and and $105 million for estimated future costs. According to the Associated Press, Southern Co. says it will write off a $152 million loss as a result of the settlement. The settlement provides that Georgia Power will pick up two-thirds of additional costs beyond the current estimate, according to Morningstar.
Construction on Vogle 3/4 is running seven years behind schedule and is still not complete. Unit 3 went into service July 31. At the same time of the settlement, Georgia Power announced another significant delay in finishing Unit 4. In a Securities and Exchange Commission filing, the utility said it has identified a “motor fault in one of four reactor coolant pumps” and will have to replace the pump. The company said it has a spare on hand and the failure is “an isolated event.” As a result, the plant will not be able to start up this year, as Georgia Power had planned, and will be delayed into “the first quarter of 2024.”
Palisades Recommissioning
Holtec International has formally applied to the Nuclear Regulatory Commission (NRC) for permission to end its decommissioning of the elderly, mothballed 805-MW Palisades nuclear plant in Michigan and near Lake Michigan and restart it. If the NRC approves restating the plant’s operating license and Holtec can line up financing, it would mark the first time a retired plant undergoing decommissioning would go back into service.
Restarting the Combustion Engineering pressurized water reactor requires the NRC to formally waive portions of its order terminating the plant’s operating license. The license “prohibits the company from operating, placing fuel into or retaining fuel in the reactor.”
Holtec acquired the plant from Entergy in June 2022 for access to the decommissioning fund. In September 2022, Holtec applied to the Department of Energy’s Civil Nuclear Credit Program for funds to restart the plant, with support from Michigan Democratic Gov. Gretchen Whitmer. DOE denied the request in November.
Michigan is providing $150 million for the restart. Early this year, Holtec applied to DOE’s Loan Programs Office for funding. Holtec in September won a long-term power purchase agreement with rural electric power cooperative Wolverine Power Cooperative.
CMS Energy of Jackson, Mich., built Palisades between 1967 and 1970 at a cost of about $1.2 billion in 2023 dollars. It went into limited service in 1971 and got a full operating license in 1973. CMS sold the plant to Entergy in 2007 for $308 million (it cost $630 million to build in 2007 dollars), along with a power purchase agreement to buy the plant’s output. In 2007, the NRC approved a license extension to 2031.
In 2018, Entergy announced it would close the plant in 2022. Whitmer in May of 2022 asked DOE for funds to keep the plant open, a move that failed. Entergy closed Palisades in May and sold it to Holtec in June.
“Motley Fool” is a journalism operation that offers opinion (i.e., it is NOT a fiduciary and its investment advice should not be relied upon). It is careful to identify itself as a “journalism” entity (i.e., it is NOT an investment adviser) to avoid the requirement that investment advisers register with the Securities and Exchange Commission and comply with the standards thereof.