KIYU NEWSROOM

Galena nuclear update
10-24-06
Tim Bodony (KIYU)

102406_GalenaNuclearUpdate.mp3

The City of Galena continues to investigate and pursue a 10 megawatt nuclear power plant, as an alternative to diesel-generated electricity and heat.  

And Galena officials are asking the State of Alaska to increase its level of participation in the project, including the idea of bringing the State on board as an owner of the plant.  

Because commercial nuclear power has never existed in Alaska before, there is no established process for evaluating a nuclear power project at the state level.    

And the regulations governing major energy projects are unclear about whether the state could potentially be an owner of the Galena nuclear plant.    

Since the fall of 2003, when Toshiba offered to locate the first of its new breed of small reactors in Galena, Galena officials and hired consultants have been getting ready for the formal review and licensing process.   

One of many unanswered questions is who will own the nuclear plant.  The City cannot own the plant by itself because it can’t come close to meeting the financial requirements for owning a nuclear facility.  Federal regulations require that the owners of a nuclear plant demonstrate their ability to pay for construction, fuel, start-up costs, insurance, and other liabilities.   In Galena’s case, this could mean posting tens of millions of dollars in bonds.   

One of the suggestions that came from a series of white paper studies on the project is that the State of Alaska could be a partial owner of the Toshiba 4s.   

Backing up that assertion, Galena nuclear project coordinator Marvin Yoder says that the State should take a genuine interest in the Galena project, because it might not be the only one in Alaska in the years ahead.

"There were two other communities that were interested in this same technology. There are also mineral people looking hard for good, cheap energy sources. There is no other energy source that I am aware of in rural Alaska that would match the 6 to 10 cents a kilowatt that we are talking about" says Yoder.

He also asserts that the State would benefit from having a nuclear regulatory scheme that would prevent private industry from installing nuclear reactors wherever it sees fit.

The Alaska Energy Authority has ownership of other alternative energy projects around the state, and seems like the state agency that would likely have to get involved.

But Project Manager and Spokesperson Becky Gay explains why that is not the case. 

“It is not a fit. It is expressly defined out – can’t do nuclear, and Alaska Energy Authority also cannot own, by statute, any more energy projects, and that happened quite a while back. So it would not qualify for a project under the Alaska Energy Authority now.”

But Marvin Yoder from the City of Galena finds an example of major state support to a new energy technology in the Healy Clean Coal Plant. A $25 million state grant and $85 million state bond sale went into building the Healy facility, which has been dormant since a 90 day test run in 1999, due to disputes between the operator and the Alaska Industrial Development and Export Authority – which owns the plant.  

AIDEA is the most likely avenue for state involvement on the Galena nuclear project as well.

Speaking for AIDEA, Becky Gay agrees that the Healy project sets a bad precedent in general, largely because the stalemate has prevented AIDEA from recouping most of its investment, and in turn has cost the public a lot of money . 

“Healy is still in that stage of getting started or sold, but we would not want to repeat that. We would not want to repeat that experience with a nuclear project."

If an ownership proposal were to come before AIDEA, its board of directors would have to determine if the project satisfies a variety of technical and economic criteria, including the application of a lengthy definition of what kinds of infrastructure projects are eligible for AIDEA finance.  The part of the definition that comes closest to Galena’s proposed nuclear reactor has to do with new methods of generating energy: “a plant or facility that demonstrates technological advances of new methods and procedures…for the production and use of energy resources.”  

At first glance, Gay says, the definition does not seem to allow for a nuclear project.  But there is still some room for Galena representatives to make an argument to the contrary, when and if they formally appeal for AIDEA’s financial support.

"If they brought it in under this ‘demonstration project’ advancing new methods, and procedures and prototypes for commercial applications, that might work. It would then have to be brought to the Board of Directors to see if the Board would agree.”   

AIDEA’s mission statement also calls on the organization to support projects that improve the economic prosperity of a region.  Gay says that usually translates into projects like access roads, ports, and airport facilities. 

AIDEA’s financing of a project is not a grant, so the project must show its ability to repay the seed money, and pay for other associated costs, in order for AIDEA to approve it. 

The state legislature has a check on the process, in that it must approve all projects valued at more than ten million dollars.  The white paper feasibility studies on the nuclear project were state-funded, in the amount of 500 thousand dollars. 

In December, the Galena City Council will consider the biannual resolution that affirms the community’s support for the nuclear power project.   

In the meantime, the final two installments of a 7-part series of white paper studies on the nuclear project have been held up for months, pending the release of technical information on Toshiba’s 4-s reactor design. 

As Marvin Yoder wrote in a recent letter to a vice president at Toshiba, Galena’s move towards nuclear power has reached a critical decision point.