Alternate Energy Holdings Start Joint Venture With Hyperion Power Generation

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Alternate Energy Holdings, Inc. (OTCQB: AEHI) – today announced the signing of a memorandum of understanding with New Mexico-based Hyperion Power Generation, Inc. The MOU is the beginning of a joint venture between the two companies to license, build and market Hyperion’s refrigerator-sized modular nuclear reactors on a world-wide basis.

Alternate Energy Holdings has a market capitalization of $121 million.
AEHI is an interesting investment if they can get the regulatory approval for their planned South Korean APR 1400 reactors and now Hyperion Power Generation reactors.
Entergy and Exelon are retreating from new nuclear reactor build in the near term. With likely increases in the nuclear loan program, its seems fairly likely that AEHI would get government loan guarantees if they get the regulatory clearances. Dan Yurman has been covering the AEHI effort and feels they are dreaming if they think they can get the NRC to certify the APR 1400 and then get the licenses by 2014.

Alternate Energy Holdings develops and markets innovative clean energy sources. The company is the nation’s only independent nuclear power plant developer seeking to build new power plants in multiple non-nuclear states. Other projects include Energy Neutral™, which removes energy demands from homes and businesses ( Colorado Energy Park (nuclear and solar generation), and International Reactors, which assists developing countries with nuclear reactors for power generation, production of potable water and other suitable applications. AEHI China, headquartered in Beijing, develops joint ventures to produce nuclear plant components and consults on nuclear power

AEHI has a deal and is trying build the South Korean APR 1400 in the United States.

This project involves building a nuclear power plant on a 5,300 acre parcel near Big Willow Road and Stone Quarry Road in Payette County, Idaho. The nearest town is New Plymouth, Idaho. The proposed plant would include two units powered by South Korean-made APR 1400 reactors. The plant will cost between $8 billion and $10 billion to build.

Local approval: 3rd Qtr 2010
NRC application: 3rd Qtr 2011
Begin construction: 2nd Qtr 2014
Operation: 2nd Qtr 2018

How can AEHI afford to build the Payette Nuclear Power Plant?

It is important to remember that no company has the capital on hand to build a plant like this. If it were a public utility building it, the utility would have to apply for a bond, which would increase your power rates.

In our case, we will be using a combination of investor funds and loans. Here’s how it will work, which is historically how most plants like this one are paid for.

We will use two different methods, or phases with this project. Phase one will require about $100 million to pay for land, water, engineers, lawyers and applications. Last summer AEHI announced an agreement with an investment group to fund $70 million worth of the project and now we have several large international investors also interested.

Phase two takes place after AEHI receives local and federal approval; once approved, the property will increase in value to about $1.5 billion. The land then becomes an asset used to borrow $5 billion to $8 billion for construction. No loan payments are expected until the plant is operational, and once running at full capacity, it will create about $3 billion annually in reliable profits for 60 years.

These projections create a very attractive loan for most lenders.

Making this even more attractive, and much less risky, are federal loan guarantees, which are currently being increased by the federal government under President Obama. These garantees insure loan repayments, and are a very safe investment for the government since no nuclear power plant has ever defaulted on a loan. You can read more about this program on the Nuclear Energy Institute’s website:

In short, after phase one, AEHI will have a $1.5 billion asset and a nearly $10 billion asset after phase two — in either case, a very profitable proposition.

Hyperion Power Generation was formed to bring to market the unique Hyperion (formerly Comstar) small (25 MWe), modular, non-weapons grade nuclear power reactor invented by Dr. Otis “Pete”‘ Peterson at the United States’ famed Los Alamos National Laboratory (LANL) in New Mexico. They are producting a uranium nitride reactor.

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