Fitial urged to allow firm to find financing for $250M nuclear plant

A lawmaker and two Commonwealth Utilities Corp. officials who recently attended presentations on nuclear energy production based on fusion and fast fission submitted their report yesterday to Gov. Benigno R. Fitial, recommending that CUC sign a commitment letter to allow California-based Global Energy Corp. “to shop for financing for a 50-megawatt plant” estimated at $250 million.

Rep. Frank Dela Cruz (R-Saipan), on-leave CUC executive director Abe Malae and CUC deputy director for electric power system Wallon Young Fong had this conclusion: “The fusion and fast fission technology is appropriate for base load on Saipan.”

Malae resigned from his post soon after Fitial placed CUC under a state of emergency again over a cash crisis and the slow development of renewable energy, among other things.

Fitial’s declaration of a state of emergency for CUC paves the way for the award of contracts soon to Japan-based Saipan Solar System and U.S.-based American Capital Energy Co. These two firms responded to two separate CUC requests for proposal for 10 megawatts each of photovoltaic solar energy production.

Malae, Fong, and Dela Cruz said that CUC should pursue nuclear energy while still moving on with its 10-megawatt photovoltaic solar plants project.

“The nuclear reactor kicks in at year four to five and the fuel surcharge, levelized energy adjustment clause (LEAC), in the rate is a blend of technologies,” the three told the governor.

After shopping for financing for a 50-megawatt nuclear energy plant, the next step would be to negotiate a rate that is close to 15 cents per kilowatt-hour, under a build-own-operate transfer arrangement over a 20-year period, they said.

Fitial has yet to see the three-page report and recommendation because he left yesterday for Japan for a personal four-day trip. Acting governor Eloy S. Inos is heading the administration’s renewable energy efforts.

Press secretary Angel Demapan said the recommendation is in line with the administration’s plan to privatize CUC through the process of build-own-operate process.

He also said the proposed 15 cents per kilowatt hour “is certainly attractive to the administration and to the community.”

“The administration will review the recommendation from Chairman Dela Cruz along with its ongoing efforts to work toward privatization and ultimately, significantly reducing costs of utilities for the people. There are a lot of options to consider besides nuclear energy. The administration would like to delve deeper into each option to ensure that the end result is one that is favorable and beneficial to our islands and our people,” Demapan added.

Dela Cruz, Malae, and Fong attended presentations made by Global Energy Corp. in San Diego, California earlier this month. Dela Cruz is chairman of the Saipan and Northern Islands Legislative Delegation’s Committee on Public Utilities, Transportation and Communications.

The presentations were held at a Global Energy Corp. laboratory on a new, patent-pending, nuclear energy producing technology based on fusion and fast fission. The proprietary nuclear reactor technology is called Lattice Assisted Nuclear Energy, they said.

In the interest of full disclosure, Dela Cruz, Malae, and Fong said that Global Energy Corp. did not pay for the cost of their attendance.

They said the company did pay for some of the meals shared with participants from Guam, Yap, GEC scientists, managers, and principal. Dela Cruz, Malae, and Fong also said they did not receive any honoraria or payments from GEC or from any of its agents.

Dela Cruz, Malae, and Fong said their attitude was that of skepticism, especially since the adjective “nuclear” conjures up scary images of Fukushima, Chernobyl, and 3 Mile Island.

“We were trying to be prudent in that it was taking some time to review the renewable energy purchase power agreements in Saipan, and we’re unsure if they would be the best overall source of electricity for the CNMI. We asked ourselves: What if we made a 20-year commitment to each RE [renewable energy] and then along comes a breakthrough that revolutionizes the power generation business?” they said.

Based on the three officials’ report to Fitial, the common features of nuclear reactor technologies include nuclear reactions that generate energy a million times more than chemical reactions like the burning of coal or oil and that it is for base load application, operating 24/7 rather than intermittently, like solar or wind.

They said the energy cost is much lower, 15 cents to 16 cents, than that of a baseload petroleum fired plant at 38 cents per kWh or more. They said it is also lower than other renewable energy such as wind and solar.

“Fuel change is required every 50 years,” Dela Cruz, Malae, and Fong added.

They cited seven pros, and two cons, of nuclear reactor technologies.

Among the pros: the technology uses (fertile) Uranium 238 and not the (fissile) Uranium 235 of conventional nuclear technology. Uranium 238 is plentiful in nature and in non-radioactive nuclear waste.

“There can be no weaponization risk because Uranium 238 is used instead of enriched Uranium 235,” they said.

They also said the fusion and fast fission nuclear reactions do not involve any chain reaction, and so can be stopped in a straightforward manner without danger of runaway core meltdown.

“There are no dangerous or potentially dangerous waste products,” they said, adding that “cooling is done using helium instead of water.”

Dela Cruz, Malae, and Fong said the reactor plant is modular, for example, 25 MW units, and the footprint is small, unlike the large size conventional nuclear reactors of 1,000 MW.

“Nuclear Regulatory Commission regulates to ensure safety of all nuclear reactors,” they added.

The two cons: The three officials were unable to visit the prototype installation in Austin, Texas, as the permitting requirements for visitors would take a long time. They said a working up-to-scale reactor producing electricity has not been built yet.

CUC is required by law to derive at least 40 percent of its energy from renewable sources by 2012. Malae himself said this is “unrealistic.”

“And even if it were online, it would destabilize the grid. But we have to work with that because that is what the politicians passed,” he said.