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Members if you would all take your seats we'll
Speaker 4
1:48
get started in just a moment Joint Committee on Energy come to order
welcome everyone we've been looking forward to this presentation and
we will as assume the computers will be worked out in a moment she'll Mr mets you go well first let's let's dispense with the is there a motion the chair would hear a motion to dispense reading of the minutes and prove them
sent moved by Senator Mcee second
but did you second that thank you Representative Mcnair I'll all in favor of approval a minute sayy ay opposed thank you
wanna make a quick announcement a blr will will post the electronic version of the
report from excelline immediately so anyone that's either in the audience or or at the wants to follow along online or whatever could get that and I'll recognize you in just a moment Mr meads also joining us on and he'll be
attending my video is Mr Paul Murphy and I understand that NatalieRogers will also be in attendance does she would she need to come to the table Mr meadows and here she comes OK
thank you miss rogers and I will recognize now uhpresentativeladyman who's going to introduce our our witnesses today Representative Jack
Representative Jack Ladyman
Unverified
4:29
Ladyman district32. Thank you, Mr. Chairman well I I'll let them introduce theirself a little bit later but I wanted to give a little background about what has been done by Mr meadows so committee members if you
recall the nuclear nuclear energy feasibility study was authorized by Act707 of2025 it it implemented or approved a study to be completed by Mister Brian Meadows of xcll Services Corporation. The study was due in fi5 months after authorization of the act and was authorized on41625 study was completed before the July30,2026 deadline. the report consists of313 pages
the purpose of the study was to evaluate and Mr meadows will give you the details of this but I just wanted to set the framework of what we wanted to accomplish with this report and I think Mr. Meadows did a good job of that but the purpose of the study was to evaluate nuclear reactor designs and operations to determine the feasibilities of various nuclear reactor technologies to study nuclear reactor licensing regulation laws and studying nuclear reactor siding
the study was to determine the advantages and disadvantages of nuclear energy generation in Arkansas. including economic and environmental impacts. Other things to be included in the study were land and siding criteria including areas where data centers could be located where existing energy facilities are located where military bases are located and other industrial activities throughout the state
also safety criteria and engineering services were to be studied. The study included the feasibility of locating small nuclear reactors and micron nuclear reactors within the state of Arkansas. a socioeconomic assessment and impact analysis was part of the study which would evaluate workforce education training and development local and state tax base supply chains permanent and temporary
job creation, the timeline for development of new nuclear reactors and leveraging existing facilities within the state the act required that the consultant engage and consult with the department of Energy and Environment. upon completion of the report a copy of the report was to be submitted to the department of Energy and Environment the department was required to submit written reports to the governor the president pro tem of the senate, the majority leader of the senate, the
minority leader of the senate, the speaker of the house of Representatives, the majority leaderader of the house the minority leader of the house and chairpersons of this committee Mr Bryan Meadows with xcll Services is here today and going to present the summary of this report that's a lot of things in that bill and I think Mr Meadows has done a good job of trying to address all of those they may not all be addressed but there's some very good data in there. So
with that I would like to recognize Mr Meadows and if
you would please introduce yourself and who you represent please both of you
introduce yourselves for the record you'll have to turn your mic
Speaker 30
8:06
on thank youpresentativeladyman and thank you Senator Johnson is it Mr Chair
Speaker 31
8:11
I wanna it's not miss chair so ok my name's Brian Metters I'm an Arkansas native. I grew up in Fortsmith and I'm an
Chair
Unverified
8:22
Arkansas native. I grew up in Fortsmith I've had family in in Arkansas since before it was a state and so being able to do this report was very special to me because on the one hand like it's good work to do but on the other hand like I'm I'm doing good while doing work because I very much believe in the promise of nuclear industry and it's demonstrated safety and emission free baseload power and I talk about
that quite a bit in the report especially in the final version and and so I'm I'm happy to be here today if I could inter
r up t you Mr mayor I want your colleague to introduce yourself and then I'm gonna recognize you for your full presentation yes may I
Speaker 37
9:08
introduce her please for the record I'd rather she introduce herself
Speaker 39
9:14
thank you I'm NatalieRogers I'm a civil engineer withalf associates thank you ger Mr Mays you
were recognized and I assume you're you're uhowerPoint is available when and if you're
ready to to begin with that but you recognized and and and committee please we will not ask any questions until he is completed and we'll let everyone get in the queue at that time and we'll proceed with that you recognized
Mrinners thank you Senator Johnson so I think
Speaker 31
9:42
I'm gonna start first with a a little housekeeping the committee
Chair
Unverified
9:47
received the draft final of the report and in parallel with the committee's review and pursuant to the contract we completed a final
version of the report and I think it'll be it would it would probably be more appropriate for ultimately what's permanently published if you choose to publish the report to publish the final version the final version fills in some gaps and makes corrections and so forth materially there's no difference between the two reports so I'm on slide two now and I'm gonna talk about how nuclear new nuclear is both feasible and advisable in Arkansas first of all the state needs the
energy there is rising energy demandgy is projecting a35% increase over the next five years and longer term projections show that power needs will double I know that AECC has received about 1000 megawatts of perspective load requests so the demand is necessary and as this committee well knows economic progress and vitality follows energy. there are workable sites
I have gone to as part of all of this I have gone to many places in Arkansas particularly quite a bit in South Arkansas and Russellville and over in western Arkansas to talk with county officials economic development officials and they are ready and willing to take new nuclear and things in the nuclear supply chain as well. As the study shows there's several sites in both the south and in the west of Arkansas that
can support new nuclear Federal support now is the strongest it has been in decades this administration has made a step change in nuclear regulation and it's one thing to read the articles about it but I can just tell you from my own personal experience and I almost fell out of my chair if I can give an anecdote on this in the past when dealing with the regulator you would go on behalf of the client on behalf of the vendor and you're trying
to get something licensed and the NRC's answers typically well give us something and we'll evaluate it and then if they tell you no you might say to them what is it that you want and they'll say just just bring us something and we'll let you know if you like it or not and in the industry that's colloquially known as bring me a rock and you don't even know if it's the right rock or not until you get there and I remember sitting in a meeting about a year ago talking about a proposed project
and the staff said and they were very clear to make sure the safety was still priority but they then said well you know there's some other ways that you could approach this you could do it in this manner or this manner and that would also get you where you need to be first time I've ever heard that so there is a real change at the nuclear regulatory commission and its culture and that's happening now and I attribute this administration to that and there is also substantial federal funding available substantial federal funding available so
it is now is the time to move on nuclear and I'm going to put a star by that because I'll talk about this in a minute because of how favorable the federal situation is in ally state law needs only modest changes you know unlike say Illinois which had a moratorium where Minnesota I believe also had a moratorium on the nuclear. Arkansas doesn't have that there's only modest changes needed and when I get to the legislative part of this presentation we can go to that in more detail but there's no show stopper currently there's
some things that y'all could do to make it easier but there's no shows stoppers the the overall recommended course that I have for this state is I don't think that it's in the taxpayer's interests of Arkansas put a whole bunch of money in the in a huge fund and start directly subsidizing nuclear vendors. I don't think that's a good use for the taxpayers' money and frankly I don't think politically that's going to fly however what the state can do and what I do recommend is
start creating private public partnerships to identify sites and get them prepermitted for new nuclear and then at that point what will happen is instead of building a first of a kind reactor that's gonna be like triple the cost and double the schedule which is what typically happens with the first reactor build once the third or fourth of a kind of a reactor has been built in the industry that's known as the end of a kind. then at that point you already have a prepermitted site and you can just start building on it
and and you shave off about a year and a half or two years on build time by having that and I think that that's probably the best return on money in Arkansas at the moment moving over to slide3 go a little bit more detail. power demand and in Arkansas is surging I walked through all of this also we have some coal plants shutting down in 28 or30. there's no question that new energy is needed OK on the slide four
So nuclear fills the energy gap better than any other alternative the capacity factor of nuclear is 91% and what that means is if if I assume that a plant's running at 100% 24 hours a day that would be a capacity factor of 100% right? so wind and solar clock in around like 2530% nuclear is 91% it's stable it also operates when it is dark
and when the wind does not blow the footprint of nuclear is substantially smaller 1.3 square miles for a 1000 megawatt nuclear plant as compared to75 square miles for a solar farm or a wind farm might take up 260 so it's very compact for the amount of energy that it produces it has no emissions I've talked about this with some of the other legislators informally and I want to talk a
little bit about that when I talk about the no emissions or the no carbon portion of nuclear. I'm not trying to get into the debate about climate change and whether it's real or not or any of that thing I'm not I'm not going into that. What I will say is that there are markets in this world such as the EU that at some point are probably going to put a tax or a tariff for some sort of import penalty on materials that are made with what they deemed to be dirty energy or not clean energy.
and so for our industries here I believe that it will be of value to them to be able to point and say we have zero emission energy make this product and so I bring that up for that reason Finally you can stockpile a lot of fuel at a nuclear plant and I don't have to have rail cars of coal coming in every day and don't have to have huge tanks of oil there the fuel can just be ready to go you can get 18 to24 months ready to go stockpiled up
Nuclear is safer than the alternatives and then the final version of this report I I put in a pretty good graph when I take the total amount of terawatt hours like the the amount you know like essentially per capita but for energy uclear has one of the lowest death rates as compared to oil or gas or coal which is 10,100 and 1000 times so I call it's like 1000 times safer to make this energy when
we compare nuclear to other industrial activities it is by far the safest of the industrial activities that humans engage in. Localities that have nuclear love nuclear NEi the nucleargy institute has done studies on this and they find that some of the biggest supporters of nuclear are the are the folks that actually host it the people who are there know that it's safe it provides lots
of permanent positions and then of course you get the indirect economic benefit of the workers who work there and their substantial contributors to the local economy and the tax base for example A andO in Russellville on slide6 I mentioned this before I don't I don't think Arkansas about 90% of the utilities in my understanding is that entergy is
among them are taking the position that they don't want to go first in the nuclear because they don't want to pay the cost overruns and the lengthened schedule that a first of a kind build almost always has. instead they would like to be what's called a fast follower and wait until the reactor vendors can say with some certainty this is how much it will cost and this is how long it will take to build and it won't be until they get to like their3rd,4th or5th build that they'll really be able to give that information so
I was thinking what can Arkansas do to prepare to be and support fast followers and the answers I mentioned earlier about the prepermitted sites and I talk about that on slide number6. on slide7 these are the candidate areas that we took a look at for possible sighting I took a look at Flint Creek up in Benton County I took a look at of course Arkansas nuclear One and Pope County south of LittleRock
then southwest Arkansas nearcamden I could probably extend that number4 a little bit over to also include littlettle River County near Millwood Lake also took a look at Phillips County and up in Craighead Mississippi and a lot of that was driven by the all that was driven by the by the transmission constraints ultimately andnatalie would be in a position to to speak to this the both the water and the transmission constraints don't make Flint Creek a very good fit
and so I'm not I I don't I don't think that should be the first target of places where new builds should happen Arkansas Nuclear One to add additional plants there makes a lot of sense however there are transmission constraints meaning that you'd have to build new transmission lines and know there's somegy folks here in case people want to have questions for them and I'm not going to speak for entergy but I mean that that is a fact that there are transmission constraints so you have the additional cost of expanding transmission however
with that exception A&O's a really good place to put more to put more nuclear it also begins to address the problem of what happens when the existing plants ultimately retire because that's gonna be that's going to really really hurt Pope County's economy if those things retire and there's nothing to replace them southwest Arkansas nearcamden there's a lot of defense industries down there there's also transmission availability there there are certain places where it can get water. there's also what's called aircooled condensers for some of these
nuclear plants where they don't actually need a huge body of water that's how good some of this new generation is then finally5 and6 for Phillips County and Craighead Mississippi are would be promising based on local industry and on transmission however they're in an earthquake zone the new madrid zone and so it's not impossible to build a nuclear plant there you could but you're going to have increased expense to protect the plant against against earthquakes
and so that just becomes an economic question of can I protect my plant against earthquakes and that cost still makes it worthwhile for me to put it up
Speaker 44
22:08
here as opposed to somewhere else Slide
Speaker 30
22:19
8 in addition to the to the possible sites on slide seven there's other
Chair
Unverified
22:25
paths to a site retiring coal plants offer a
ready site and there's a whole set of department of Energy literature on how one would do that where you can drop in a small module reactor where where there's a coal plant military bases are another route and I know the department of defense is looking at that they're looking at that they're looking at it by service like the army has their folks looking at it and the air force has their folks looking at it and last I checked those those branches have not gotten together to figure out a path forward what I do know is that the the
naval reactors people who put the reactors on the submarines and aircraft carriers are not involved in the landbased reactors they just don't want to have anything to do with it. I understand that I think that west and southwest Arkansas absolutely warnt further study I think that's a great area that's population that that really wants new nuclear and wants new industry and then also there's been recent changes to the sciing rules at the nuclear regulatory commission and it used to be that you had to put them absolutely out in the middle of
nowhere but some of these small modularle reactors allow you to site it a little bit closer to population centers and so that's very helpful as well the financing and I need to check and see if Paul Murphy's on on video here is he not ok something
Speaker 49
24:05
Bryan I can see and hear you. I don't know if you
can see and hear me. Well, so I can hear you. we can't hear you sir but we don't we don't have the slides and and we understood that the slides were gonna be coming from you and I guess we'll just continue without them
Chair
Unverified
24:20
I'm so sorry I must have miscommunicated Paul Murphy was not gonna have separate slides
it's it's ok Murphy would you like to identify yourself for the record and then we'll go back to Mr mets sure Paul Murphy
Speaker 53
24:32
was part of the team that put together the report
Speaker 48
24:38
and don't know what more you need but happy to give you some background on my expertise if that's just you and your your name and
your company and then we'll we'll go back to Mr Meads OK Paul Murphy Murphynergy and infrastructure consulting thank
Speaker 54
24:52
you Mr Chairman. you sir Mr mets you can continue now we're on slide number 8 on slide slide number yes sir so I'm moving to slide number
Speaker 30
24:58
9 now to talk about financing. Paul, do you want to cover slide number 9 or do you want
Chair
Unverified
25:02
me to do it and you just handle questions
whichever you prefer why don't you go ahead and handle slide number 9 please talk about the financing
Speaker 53
25:16
that way we'll have the expert doing it Sure. well thank you all for having me and thank you for your interest in the topic. you know when we
Speaker 59
25:24
looked at financing and you look at the report we get into why financing is difficult for nuclear plants and it's you know it's important to remember that there are over400 plants operating in the world today. many more of them built so we know how to do it it's just that circumstances
have changed you know every commercial plant built in the United States when it was built was built at a regulated market by a regulated utility that didn't always go perfectly but it certainly got the fleet built we still have the largest fleet in the world but you know as markets have changed and you know experience with the utilities has lapsed in terms of development not by any means in terms of operation we now have to think about
financing a little bit differently and what we did in the report was look at a lot of different possibilities and then really focus on what we think would be achievable for Arkansas looking really at the three phases so you know development taking you up to the receipt of the construction permit from NRC and of course the construction phase taking you through commercial operation and then the operations phase you know thereafter and recognizing that
the risk profile has changed dramatically when you move from phase to phase which of course affects the availability of certain types of money and of course the price of the money because price and risk go together a unique issue too in the nuclear industry is long lead items which are purchased before the construction permit is issued so there's even in that development phase there's a heavy lift if you will to start placing those orders for long lead items and you know you
don't pay the full amount but money you're already moving your your expenditures to the left in your schedule and so when you look at what's been done historically what's happening now what hasn't worked you know there's a prevailing theme throughout is that you know governs government support is necessary and that can take a lot of different forms it's gonna be different depending on the resources of the state and so you know we were very mindful of looking at what other states are doing because there is a bit
of competition for projects and so it's important to be mindful of what your peers are doing recognizing all states are not equal in terms of size and financial resources but you know when you think about the various stages sourcing government funds becomes very important sourcing government programs becomes very important. O'brien mentioned that a little bit ago in his remarks but you know when you look at what we've done here essentially
it's important to understand that investors don't really like to put money into nuclear projects during development construction. Once they're in operation very different but the reason for that is because most investors don't want to wait for years and years and years before they they make you know return on their money and so that's why you see that in that development phase there's a very limited set of options to include you know possible export credit finance from other countries recognizing that the supply chain
is global so you know when you think about westinghouse and G Atachi, you know they're a lot of their supply chain comes out of Japan and Korea so that opens up financing opportunities you know we look at the department of Energy funding that's available that becomes very relevant when you get into construction and you know when we think about sort of this is a problem solving exercise two of the things that that really become points of uncertainty are
where do you get the money for long lead items that's a development phase and then because nuclear projects have had a history of going over budget and over schedule there's always the question if you tell me it costs xx what if it's x+20% where's that 20% coming from and so we need to solve for that in the financing structure so that's why there's that that reference to cost overruns oncece you get an operation, very different story
and I think that the message in in part of the financing is that the economic case has to support the financing and you know what we've learned dramatically in the United States is that when we deregulated electricity markets in certain states nuclear plants don't do well because they're price takers not price setters and when you have subsidized renewables and dispatch preferences and cheap natural gas it makes it very hard for an asset that's supposed to run all the time to do so and so if
you're not in a regulated structure that's where we make reference to having you know creditworthy power purchase agreements which also ties into a concept that we have in the report which is you know one of the trends that we're seeing in the market is that instead of thinking as a nuclear plant as a black box that produces electricity and puts it into the grid now you think of it as a subset of a larger project and what does that mean? well if you think of
an energy hub or an industrial hub where you have your tenants they could be data centers they could be you know major facilities steel cement, glass chemicals you know we're there the off takers because they want the baseload clean electricity and possibly
Speaker 48
31:09
the high temperature steam from the reactors to support their industrial processes and industrial decarbonization for for competitive purposes you know that becomes very
Speaker 59
31:20
interesting if you think about developing the project the capital p project is all of it
Speaker 48
31:26
not just the nuclear plant and so that gets into more of an economic stra strategy and industrial strategy and export strategy for the state which can get really interesting
Speaker 59
31:36
and exciting because the ability to deliver clean baseload power becomes a competitive advantage for the state so again what we tried to do is look at all the various tools reco of course
that there is government support that is going to be needed but to think of it as being you know a surg ical tool not you know something that's a blanket answer to all things and think about where that support is most needed how we can confine that support and then also you know what we've we've strongly recommended is to structure the project to refinance it so that you know when you think about the more
expensive more scarce resources and development and construction then when you're in operation the project's deres you can bring in other sources of money and lower your overall cost of capital for the project so that's why we think of it aacc across all three phases and try and target the support to
Speaker 48
32:41
match the challenges and opportunities of that phase. Bryan back to you. thank you Paul moving to slide 9 the
Chair
Unverified
32:55
the legislature can of course support these different stages already on the books is the Acts373 of2025 which allows utilities to have the it's called Cweb I I forget what it stands for but construction work in progress yes thank you I have my
bill here so I I I
can tell you what it is for this one yes which effectively allows the utilities to bill the
Chair
Unverified
33:27
which is tremendously valuable because it reduces the capital costs so you're not having to pay for the interest for the money up front it reduces the capital cost to
the utility sorry to correct you Mr. Mets I just I
had to get that one in en I
Chair
Unverified
33:45
I think we're gonna call that one beyond the scope and I'll allow you
to stay in your lane I apologize for interrupting you go ahead sir I want
Chair
Unverified
33:53
you to continue yes sir so other tools that the
legislature could add would be a bridge loan for early development work maybe some type of cost overrun mechanism a state guarantee that could support the existing loans state tax incentives or another possibility or as assistance for securing a long term buyer of the power the last one I'm I'm not sure how much assistance really necessary for that but that's one of the possibilities
Moving on to slide 11 a lot of the states have created some sort of nuclear agency or nuclear czzar or giant fund or an advisory committee and so forth Arkansas does not need to pass separate legislation to make that happen you already have and it's it's been sitting on the books since the 19fi0s and to my knowledge it's never been used but there's a position called the atomic coordinator that reports to the governor now in the draft version of the bill that I proposed
I suggested setting up some sort of separate nuclear agency and I think that that's a possibility and you know Senator John talking about staying in my lane I'm not gonna wade into how like politically it ought to be set up but there are options you could set up your own little agency you could tie it with the economic development folks you could have the atomic coordinator who may report to the governor or perhaps that person will just report to someone else there are a lot of different options here but you don't necessarily have to create
a new agency because there's one already on the books it just hasn't been used it got passed back in the 1950s when everybody was was really pro nuclear and then and then nothing really ever happened with that the changes that I do propose and the proposed legislation that that put forward is go ahead and define nuclear as clean energy that's not going to have any immediate practical effect but it may have effect later on with the federal programs expand the atomic coordinator's duties and go ahead and get that role filled
and give that person to staff maybe or maybe not create a nuclear energy development fund and I think that becomes a political question on just how much money we want to put in there but if we're gonna do private public partnerships with identifying sites and getting them prepermitted some money will be necessary for that there's there's a a low level radioactive waste
restriction that's on the books now that restricts that to only land that's owned by federal or state government and I think it would be better for future development if that were removed because that doesn't fulfill any safety function because if a private person did it they're still being you know the company is still being regulated and safety so that's something that I think should come out moving on to the last slide so summing up
oh there's one other thing that's not in the slide deck that I do want to address and I talk about it in the report I am not I'm not a utility lawyer and so I'm at best a dilettante in that area and there exists some sort of public service commission statute that has certain requirements if power plants are built that exceed50 megawatts and they have to get some sort of certification or environmental thing or something it's something along those lines
that is something that's going to need to be clarified and frankly I questioned if it's even necessary maybe it just gets repealed but what happens if I come in with a module reactor that has like330 megawatt modules is that over the fi0 megawatts or not and so these are some of the things that need to be considered but we'll want to get the utility folks both pro and con to weigh in on what that change should look like I didn't add that here because that would want to make sure that people who really knew what they were doing were doing that
so thank you for this opportunity and I look forward look forward to working with you in the future to take the next steps to get us going forward and at this point I'm be happy to take questions thank you
Mr meadows appreciate the work you've done on this and we're we're gonna open up if people are already getting
in the queue. I did want to ask you a couple things to start
the the first is that of the and I love theOac the a good basically we're talking proven technology relatively proven technology versus cutting edge technology which in this business I presume means slower approval at the regulatory level is that a fair way
to describe the yes senator I think I'll do what they what they teach you to
Chair
Unverified
39:02
do in improv I'm I'm going to yes and yes and I I
would I would add to that proven economically of course right because the the technology in my opinion is is really the the least fuzzy thing about the new bills like it's gonna work but can we build it economically as a supply chain there is the design mature enough that they're not constantly making changes to it so yes yes sir and and
feel free to bring Mr Murphy in if you want to get him to answer
this the the sea whip which we've already
brought into the discussion and I I did bring literally brought my electric bill because it's already on there and that's not any nuclear plant that's simply the the entergy portions a portion of the coal plant that and there may be some other renewables that are in that but that's strictly an energy bill but is it fair to say that when we look at the sea whip we're and and without redebating the
bill we passed last year which I voted against and many of my colleagues here were we're all over the place on that thing but in my opinion it it changes substantially the system we've had for privately owned utilities investor owned utilities it instead of you go out into the capital markets you you get the money you need whether it's selling stock or or borrowing the money and then when the
facility is is producing then just like when you they build a new Walmart in your community when you go in the first time and buy a loaf of bread you're paying for the bread and the flour and the delivery and you're also paying a little bit for the cost of that building and but now we're shifting that upfront costs where you're as I did on my bill yesterday paying for part of this generation that I don't have yet now mine was a little over $20 a month last month
and that's without adding a nuclear plant or two or three to the mix and I'm I'm certainly not against I know we're going to pay for it. I mean consumers pay for the product they consume I get that but is it if it is if this were a co op instead of a of a investor owned utility we'd be members and we'd be equity owners so to speak in this but in effect I've I've got the I'm not an equity owner in entergy and I'm not picking on
entergy they are just the particular investor owned utility that's serving our state and others are s similar boat on this but our in doing this change is there enough financing capacity with the sea whip to take care of of the proposed gas plants and then start bringing in something that is a tremendous capital expenditure whether it's one or two like our
introduced projects at Russellville or if we do with SmRs or or if if we kind of spread the love around different ways I know that and and and that's a thing that's subject and I'm I'm for the small ones because I think once we get that standardized thing you're you're pointing out how it in one of your slides it it significantly reduces the long term cost but are we are we looking at overburdening ourselves in the
financial sense if we use the Cwhip to do this and this and this and you know why can't they go to the capital markets like they have for the past 90 or 10re0 years could you respond to that Paul do you want to take this one? I'm happy to
Speaker 80
43:08
but also you're there I I thought this might be more in your bailiwick
Speaker 53
43:14
go ahead so senator a great question and I'm old enough and long enough
in my career to proudly say I don't
Speaker 59
43:22
know and the reason I don't know is because you would have to really model everything out that that the state is gonna do make decisions on how many reactors are going to get built you know do the full financial model for the proposed project and then look at what the quip would be bringing in and how that might help in the financial model to you know like the UK has done the regulated
asset base which is just kind of a takeoff on what we've done in regulated markets in the United States for a year so you know it's helpful you know the more calls on that that facility for different projects that would all have to be modeled out I think that you know when you think about why the state should do something you know in the report we talk about doing an economic impact analysis where you look
at impact to the economy of the project and when you look at you know when you do a financial model it's helpful to a point it doesn't address a lot of things like job creation tax revenue decarbonization you know advanced technology into the state ripple effects you know to the secondary economy because of the plant and the jobs that are created and then the the follow on economic impact and when you model that
over 80 years the numbers are staggering you know we've done that for for other states other countries and you know I think from a policy perspective when you consider electricity is critical infrastructure and then you look at those benefits that are created which it's very important to to run those numbers so that you can make
that case you know I think the governments have the ability to look longer than corporate boardrooms you know because if you say in a corporate boardroom hey in30 years look at what this plant's gonna do everybody in that boardroom will be dead in30 years so it's not an audience that that thinks along those timelines but I think when you do the modeling it comes down to a very simplistic if you if you give me two units of value and I create 10
you do that deal every time and if I structure it so that it can actually give you back those two units of value that makes it even better and so I think that that's influenced our thinking on the why of why the government should do certain things and you know coming back to the the which I started with which is I don't know the answer to the question because you would have to do all the modeling to see what you know what the push and the pull is to see how much support's needed and when and what the other demands are.
thank you thank you Mr Murphy and and your candor is greatly appreciated by the committee I had one final question and either of you can can weigh in on it your map did a great job of pointing out areas within the state of Arkansas However if you go down to our southeast corner and then you go40 miles south into Richland Parish, Louisiana and meta is putting in the I would call it the the mother of all data centers
recently returned from a conference where Louisiana officials were there. I did not realize the footprint of this facility is equivalent to the size of Manhattan Island. and I'm and that there's there's good and bad in all this we know data centers are controversial there's a lot of information that's flying around some of it's actually true some of it's not but the fact is that's an entergy service area as well
are we and what it's easy to say well we're Arkansas we're just gonna be concerned what's going on here but I remember I'm old enough to remember a few years ago when entergy had another project in another state neighboring state of Mississippi that our ratepayers ended up on the hook for part of that so I'm I'm just saying if there's enough power to serve the meta data center in in Louisiana are are we are we ok to look at this from a we're in Arkansas standpoint
versus systemide for entergy or even anything else that's in our transmission service area. right so senator you you you're correct
Chair
Unverified
48:12
in that you can't just focus on just Arkansas the fact that you have such a a huge load just over the border will
Speaker 30
48:21
affect the the energy prices and I believe that's all in myo which is the transmission organization that runs that and electrons don't pay attention to state
Chair
Unverified
48:35
lines and so that's gonna run up the price of nordic grid operators thank
God or some people would have been freezing to death in the dark a few years ago if it weren't for that but ok I I I think we don't have to go into we have several people in the queue and we'll start Senator Mcee you're recognized Thank you Mr Chairman and first off just want to say
Senator Matt McKee
Unverified
48:56
thank you all for the work that you've done excuse me obviouslybviously this is a very comprehensive report you put in time and effort. We appreciate
the information that we have as a sponsor of the bill that called for the study you know our goal is not to put Arkansas in the utility business but to look for ways to see the field so that we take down any barriers that might exist or obstacles created by the state and looking for opportunities to make that playing field easier and make it easier for business to do those developments and things like that you you talked a little bit about
early site selection and development talked a little bit in the report about the opportunities for some of our industries in Arkansas to get some con certifications so that they can be productive in the nuclear supply chain whether it's in Arkansas or around the nation you want to talk a little bit about what it would look like because there's we always have the option as a state to do nothing right just let the market develop as it as it will and we are along for the ride but you want to talk a little bit about what it would look
like with respect to jobs and economic development and industry if Arkansas as a state decided to do nothing moving forward and then I'll have a follow up if that's all right Mr Chairman. Yes so I
Speaker 44
50:21
I think a good analogy to that senator would be
Chair
Unverified
50:26
when when we take a look at the economies of countries so for example one country will subsidize a particular industry and it hurts American industries which don't receive those same subsidies
and so or perhaps other economies other countries will have much more relaxed labor and environmental requirements and therefore they're able to make goods cheaper and therefore it would hurt the US economy and so if I use that analogy and I look at Arkansas and then I compare it to say Tennessee and Texas which are both neighboring states that are putting in huge amounts of money and effort to encourage new nuclear
then then that's where the business is going to go they're going it's going to go there because they just don't have the benefits in Arkansas that they would have in these other states I think that there are ways that we can get equivalent advantages without pouring hundreds of millions of dollars into some nuclear fund which again I'm not recommending but there should be something simply so that our neighboring states appear to developers to
be the more fertile ground whereas Arkansas is just ignoring it so I think it's necessary to do just to compete with the neighboring states follow up I
Senator Matt McKee
Unverified
51:53
appreciate that but we're talking about hundreds of millions if not billions of dollars in economic development not only for the state but for the industries that are located here if they pursue the certifications that it will allow them to compete in that market we're talking about tens of thousands of jobs that that that might not be
completed if we did even the minimal amount that you've suggested being early site selection and development and the updates of some of our existing laws that we have and and I think
Speaker 71
52:24
I want to add to that because it's what I I added to in between the
Chair
Unverified
52:30
draft and the final I've been thinking and and this aspect is out of scope but it's worth mentioning I've added the recommendation that economic development be
encouraged and perhaps the state could fund it to take Arkansas industries saying steel or manufacturers of pumps or INC equipment and so forth and have them receive the nuclear certifications that's necessary for them to enter the the nuclear supply chain I know from my own personal experience talking with other companies who are entertaining the idea for them it's a catch-22 they don't want to spend the money to get their nuclear certifications until they know they have a
contract to build nuclear staff but at the same time people aren't going to contract with the company to build nuclear stuff if the company they're contracting with doesn't yet have its certifications so that would be a good example what you're talking about is is how much economic development potential is out there so apart from the power situation for our industries themselves if we could get them the nuclear certifications it's called an NQA1 or an N stamp then that would allow them to go into the market without having to that catch-22 issue it's ok if I do one more
Speaker 76
53:49
be quick yes sir I come back to you later have a lot in the queue I appreciate that answer I would
Senator Matt McKee
Unverified
53:56
I would never presume to speak for our investor owned utilities but I would I think it's probably safe to say that as you did I believe in your presentation that they don't expect to be first adopters, right? They're they're not going to be the first ones in the queue for any of these developments but they do want to be early and as soon as we reach those NOacC builds where the economics has proved and the technologies is there obviously they they want they
want to be involved in that process so with respect to some of the legislation that you've passed how does that how how would some of those things affect Arkansas in such a way that it would encourage whether it be private investors or the federal government to be a part of those early builds that haven't reached theOac place where you know Arkansas is not Texas we don't have $100 billion to stick in a fund and start throwing it at a different developers and and I don't think we're interested in doing that but how would some of that
legislation affect those other early adopters and developers ability to come into Arkansas hire Arkansas people secure their supplies in Arkansas and therefore grow the economy here right all of that helps all all of that helps senator and I think and it's
Speaker 45
55:05
a classic political issue if I just if you just throw money at a problem
Chair
Unverified
55:10
does it help the problem and the answer is not necessarily but if you throw smart money at the issue it's going to have great returns
thank you sir senator hickey you're recognized
Senator Jimmy Hickey, Jr
Unverified
55:31
thank you Mr chairir. One question just to you Mr chair we're just hearing the report today this committee we're not planning on taking any action on
this today are we we we will accept the report and there's a a technical issue
senator that came up from the secretary ofnergy andnvironment because the original legislation was directing them to implement the
study and the committee took it on and the secretary wants to make sure that they were deemed to be in compliance with the statute even though we we we the committee and and Blr hired Mr meadows and his company to do the study but otherwise there's no official action that would come out of this committee today and I'll ask my co-chairpresentative shepherd he concurs with that analysis ok I just I wanted to make sure
Senator Jimmy Hickey, Jr
Unverified
56:25
we're not gonna ask we're not gonna ask the bureau or anything like that to start drafting any type of legislation for the session
Speaker 110
56:31
or anything like that or to vote in that committee
no certainly you and I and any other person that's gonna be here in 2027 could work on that senator but I hope we at least talk to each other about I don't think we need 18 bills on this subject to this committee wouldn't would be meeting an awful lot if we did but I appreciate you asking that thank you sir and some of this and again I understand
Senator Jimmy Hickey, Jr
Unverified
56:53
this is just a report but you know you're not
going to have any specifics but just on the financing part of this with this state bridge loan and maybe Mr Murphy or what or with Murphy is gonna can be able to answer this but so we're talking about a state bridge loan how much are we talking about I mean and again I know it'll be round numbers we're talking about 110 million,100 million,500 million what are what's we gotta have an idea of a ballpark on that Mr Murphy well again
Speaker 59
57:29
that's the classic lawyer answer it depends you know on the type of reactor how many you're going to build I mean I think it would be easy to say that you're 8 figures to the left of the decimal point so you're probably gonna be in the tens of millions of dollars you know and again you would set that for a certain amount of time and then it would be taken out so you're just you know you're carrying the cost for the project with state money that
then would be coming back to you and you know a twoyear time period something like that but you know the it's a great question it's it it but sadly it's a it depends if you're talking a large reactor or small reactors multiple reactors you know part of that would be used probably to deal with the purchase of long lead items and so you know you're looking at a period of time that could be 2 to4 years before your construction license which is really difficult for developers to carry that and
then as you get closer you could construct your license you're gonna be bringing those other sources of financing which would then take out the bridge so with a bridge loan like
Senator Jimmy Hickey, Jr
Unverified
58:39
that would you peresce that the state would have like a first lien position and some type of marketable assets or are you just talking about we would we would provide a bridge loan because some bank or whatever would want to see the equity that was coming from us so that we weren't in a first lane position how how do you see that
Speaker 115
59:04
how would you see that to be structured you know I think I would
Speaker 59
59:12
first look to who or who's gonna be the owner of the project so you know if it were entergy for example you would be you know you would evaluate it as a corporate credit and you would expect it to be backstopped in that fashion so you'd be looking you know so really it's it's for liquidity purposes I think if you were going with more of a
developer that is less well capitalized that opens up a whole host of questions because you know at that point you know the way you're question moves is I think is exactly correct like if if they are not well capitalized and you're sort of helping them along you wanna take security in the project now you know you certainly don't want to have security in an operating nuclear plant that that gets very messy but you know security in the site security and you know
the orders you know having a discussion if this is for the purchase of long lead items about whether you know how standardized those are so that they might be you know repurposed to a different project resold all that kind of stuff for things you would look at but you know I think for the state to do that they would have to really look at the players in the project and what the money's being used for and then act appropriately and think I'd agree with you there and
Senator Jimmy Hickey, Jr
Unverified
1:00:33
I'll be honest that gives me pause but
you know with enough documentation and lean positions and you know looking at the company maybe I could get past that. I don't know that personally that I could ever get past this other part that we've got in here with something called a state cost overrun backstop facility I mean from my standpoint I would hope that this body would never do that that that seems about about as most risky thing as I could ever think of for the state or the
taxpayers or whoever I mean because basically what you're sitting there saying well we're gonna have this project that goes along we get down to the end of this thing and well we're $200 million over and to finish it out the state's got to step in to to finish it so I don't know whenever we do this legislation or whoever's looking at it I would hope that we wouldn't even think about going down that route so that's more
of a comment for me but I will definitely be pushing never to
Speaker 60
1:01:48
do something like that. thank you. Mr Chairman would you like me to just address that because it's a great point. Go ahead Mrurphyyen you knowsenator you make a great
Speaker 59
1:01:58
point and and you know there's always this moral hazard question about you know if there is a cost overrun you know does that create bad behavior and you know the the point of it is of course it's
not charity you would you would heavily structure this he would only do that if the project were thoroughly diligenced in all aspects from the technology to the delivery to the economics to project to all of it because you don't want to be sort of sitting there with a blank check and you know you could think of it as layering you know as the or the is the first dollars in excess would have to come from the sponsors as opposed to the state and the state would be
there later you know obviously that it if you would structure the repayment you know sort of as a last in first out kind of a facility so that the state would be assured of getting its money back you know and that gets into the questions of the technology and and who the project participants are so you know this is not an issue unique to the state of Arkansas it's an issue on every nuclear project everywhere and it has to
be thoughtfully considered you know the if it were me you know when you get into the contracting structure you would certainly want all the project participants to be putting their profitability at risk so that you know the state isn't coming in providing money and then you know the the E pc contractor the reactor vendor you know they're making their profit on a project that didn't go well well that to me is not acceptable either so
you know there it's a question that has to be answered and there's no right answer to this we could debate it for a week and and not resolve it again nothing specific to your state at all it's every project and so you know there are ways to deal with it to address your concerns but that gets into the very specifics of the project the risk allocation the repayment structures and all that so my professional view is it can be
Speaker 48
1:04:15
addressed. I also say it is a valid concern and and we need to be a
Speaker 60
1:04:20
focus going forward for sure thank you senator hickey thank you
for that question I appreciate when you bring your banker hat to the committee because it's obvious that the last thing we're gonna do is have the taxpayers of the state of Arkansas holding the bag if something goes
Speaker 109
1:04:36
wrong in this whole process thank you let's see
p re s ent ative Gramli you're recognized
Zach Gramli
Unverified
1:04:51
Thank you Mr Chair and I guess to echo a little bit of what senator hickey was saying. I mean the first thing almost out of your mouth was we don't want to use taxpayer funds on some of this stuff because I was looking a little bit like Georgia's newest nuclear plants we're talking $1020 billion over and that was the first of a kind so we wouldn't expect that much but we could like literally bankrupt the state if we were to do some of this stuff so I just want to make sure that's in mind as as we go forward
and I guess just some other just really two broad things first off you know we said entergy doesn't want to be the first. who should we be watching to be the first and we're looking at Texas, or who's gonna be the first to do this stuff if not us I would look
Chair
Unverified
1:05:39
more toward the vendors which vendors are gonna be first so the AP1000s which are run by Westinghouse already has the the ogel projects the ones in Georgia that you mentioned done for me personally I'd like to see maybe one or two more successful AP1000
builds xenergy it's a high temperature gas reactor that's doing its first of a kind with Dow Chemical down in Texas and then they also have a fast follower with Energy Northwest up in Washington state where they're going to build some more reactors there there's a group or a reactor vendor calledairo's Power that's building some prototypes up in East Tennessee at the Oakridge site there are several others with other Department of Energy sites and I I know don't I don't mean
to leave any of these vendors out but but they're all moving very quickly so to me instead of saying well such and such state did this I would look more at which vendors can I look at and say ok they've built it they have a mature supply chain they're they're willing to make some guarantees on the price and accept some risk of overruns and so forth that's what I would look for and then I guess you know I'm looking at like internationally we have places like China making
Zach Gramli
Unverified
1:06:56
30 right now are in construction more on the way where's our like do we have an Americanbas supply chain are we gonna be bringing stuff in from all over the world and my guess with senator Mcee's question like how do we bolster Arkansas to help build reactors so currently you
Chair
Unverified
1:07:12
can't build a reactor without relying on international providers like so for example reactor forgings come out of South Korea I think on one project I was on the main coolant pumps were coming out of Italy it's just it's such a specialized capital intensive
endeavor that it's really a worldwide industry now to bring in Arkansas industries I don't think that it would cost very much but the the state could help with the certifications of our steel plants INc manufacturers and so on so they have that certification ready and then they could go forward on that and I I think that you can get those certifications that's measured in the hundreds of thousands of dollars like low hundreds of thousands of dollars
Zach Gramli
Unverified
1:07:57
like one or two and then I think the last question I was looking at some of your site permitting the sites that were chosen but you know there's technology that's not proven yet. I know on one of your slides that talked about how there's going to be air cooled stuff so you really won't even need for water so should we be revisiting these sites in the future as technology gets better for like putting these kind of plants there and permitting yes yespresentative we sure could and
Chair
Unverified
1:08:21
I think the the the site that I would want to revisit first would be up in northeast Arkansas because of
the seismic so as the technology gets better and we get more proof then maybe addressing the seismic issues becomes a much lower cost and there's something that they can do do for that some some of the techs can actually put up with the the size the expected seismic issues up in northeast Arkansas but but others can't but as they become proven and become more reliable I would want to revisit that that siding decision if Japan can build them I don't know why we couldn't up there all right thank you
right and and I might add as you know Mr
Mes we got some serious energy consumers in Mississippi County with the steel industry I obviously they're doing well and they've got the transmission lines to do it but if they grow and as we assume they will then we're gonna need power in that area New madrid fault notwithstanding and and I'm one of these people that I've I've read the history of that area in
1811 and I don't can't imagine what would happen if we had that kind of an earthquake again but we you have to factor that in so I was grateful that you you covered that in your in the study uhpresentativemcgrew you recognize thank you Mr Chairman in the demand that's
Representative Richard McGrew
Unverified
1:09:49
increasing35% I think that figure came from energy and did y'all look at, did you look at that at all or other than just taking their
information did you also look at the infrastructure that was needed this may be something that's not in your your review. also a little bit more discussion about what type of reactor might be preferred is a reactor like nuclear one or small small SmR what and the third question do you in this did you find any major Arkansas companies that are really interested I knowgy is but anyone else in
Speaker 31
1:10:33
So address those in order or just as an order to representative thank thank you for the
Chair
Unverified
1:10:44
question. So I cited entergy and I believe I remember correctly I think it came from their IRP but it came from some official entergy source but that's not an isolated quote that's shared by other utilities and other studies that are looking at that so that is corroborated and as far as infrastructure the infrastructure comes up with the transmission if I build it can I push the
electrons out so that people can actually use it and there are some places where yes we can absolutely get it up on the grid and push the electrons out but there's other places where it's more constrained and unfortunately Pope County is one of them if I remember correctly I think that they have room for about a500 megawatts so you can build maybe a300 megawatt reactor there before you upgrade the transmission but if you go over that you're gonna have to spend money upgrading the transmission and so then that leads into an economic question right?
how much does it cost to earthquake proof the reactor? how much is it going to cost to upgrade the transmission if that's needed and so that all gets factored into the economics with you know can I make this this project become economically viable as for your your second question on the reactor technology I would recommend I'm not recommending a particular type of technology for energy for electricity generation. I think that they will all do a fine job of that I do think that if you're
using reactor technologies for process heat that you're gonna want to use what's called a high temperature gas reactor because it operates at a much higher temperature than others but in my view in the industry like it's it's like saying I need a car to go to and from work. OK well what's my best possible car to do that well ultimately at the end of the day if it's a new car it's going to be reliable enough to get you to and from work and that's really my view on the reactor technology there now the technology
could be changed and you might want to change it like let's say I'm in an area where I don't have a lot of water and I know that the corps of Engers requires a backup and maybe my backup is an airold condenser so I would want to select that kind of technology or I'm putting the technology in northeast Arkansas so I'm gonna have one that's particularly fortified against earthquakes and so I think that's where the technology comes in it becomes very site dependent and use dependent. and then on your third on your third question are there other companies that are
interested I know that southern Company which is over in Alabama is well they built the initial ogel ones I know that TVA is building new nuclear mainly over there at Oakridge I know that within the state there are other entities that are interested in purchase power agreements like they would like to take the the the electricity off of the plant I don't think that they want to own it I'm recalling for example OgNE Ookklahoma Gas and Electric which
like kind of creeps over into Arkansas just a little bit to grab Fort Smith they gave testimony a year or two ago in the Oklahoma legislature to say in essence like you know we're happy to take power from nuclear but we don't want to get into the nuclear business and it's my understanding that that swepco is interested in going forward on new nuclear and that their CEO has made statements to that effect thank you Representative beck you're recognized thank you Mr chair
Representative Rick Beck
Unverified
1:14:13
my question is a little bit about of I wanna double down on the cost of overrun aspect of it that that a stretch and I'm glad it senator hickey did a lot better job of covering that than I would have done but that is a concern also on my part the other concern I have is we talk a lot about cost overrun and I know it's early in the SMR area are we looking at cost overruns
for SMRs to be the same as the costa runs for the what I would call the one of the kinds that we've almost all of our light water reactors are one of a kind reactors they they were designed on site they were built on site the SMRs are gonna be for the most part what is we're being promised there will be premanufacturing just assembled on site my question is is from the financials aspects of this how much do we think that SMRs would or do we even believe that SMRs
will reduce the cost overrun associated with the very difference in the nature of those two types of reactors because they're they're really nothing alike so this this is my
Chair
Unverified
1:15:26
opinion and I can't point to any studies or research to back this up but as a veteran of the ogel project I formed opinions about first of a kind builds and it is my opinion that on the first of a kind build I personally just expect it to cost triple whatever the salesman say and take about double the time to
build it because that's what happened at Vogel. I don't think it will be worse than that though I don't wanna go into what happened at Vogel but you know one could certainly get underneath those but if I were a policy maker a decision maker like yourself that's the expectation I would have going in what I would be preparing myself for so to answer your question about you know how does the overrun on an s on the first kind SMR compared to you know a full size reactor
well you know if a full size reactor costs6 billion and the you know and it may be triple the price so it comes in at 18 like the ogel projects did for each one of those units you know what if I have a an SMR that's supposedly $2 billion but it's a first of a kind build. Well, I'd be bracing myself for a possible6 billion dollars cost for that because that could happen on the first of a kind build what's interesting and this is why've I'm feel very strongly about the theOac strategy is that even on the ogel project like that first
you know you hadogel3 go first and then trailing about four or five months behind it was Vogel o there's about a30% reduction in the cost on Vogel o on Vogel3. that's how rapidly that goes down now it only works if you're doing exactly the same kind of plant and so you gotta be like and and I knows representative you're you're an engineer so I please don't take this personally but like someone needs to stand over the engineers and tell them to put their pencils down we're just gonna build this plant the same way and that's how you actually get the cost savings
Representative Rick Beck
Unverified
1:17:23
I appreciate that. Now I have one other question and trust me I I am very I do believe that I I'm more of a SMR type person I do believe that's gonna help us out because it it also helps us with another issue that we have which is transmission and we don't have near enough of that transmission and this is going to be negative but I is is a concern I think that the the this committee needs to hear. I quite honestly accidentally read one of your disclaimers from one of the companies that
prepared for this and if you read that disclaimer any use of this report or any part by any users is that is that the user's owner risk I'm not gonna mention the companies makes no responsibilities warranty expressed or in implied regarding the completeness, the accuracy, the current see the suitable suitability of the information or the conclusions in this
report and multiple vendors said that the reports were they didn't check it it actually says that they didn't check any of the our that they didn't check all of the independent information that was given to them they just basically rolled it out to one of the vendors even says recognizes excel as the client and says that this is only for excels purpose and that if they share it with a third
party that they had to have prior approval to doing that I don't know if if if if you have that already or not but that's that's one of your vendors but that that vendor also almost use the exact same information as far as like you know this information is coming out to we didn't verify all the independence and I and I as an engineer I can understand that we're we're counting at a top level here we're kind of just looking around here a little bit but this is climbers basically you know the legal eagle's got a hold of it and they basically just said you know use it if you
want but if anything's wrong or or like that it's not on us it's all on you because you use this report and I I would encourage the people in this committee to read the disclaimers by these vendors because they are very clear that this information is not that causing the question I should say the accuracy or the completeness of this information and these reports so yespresentative if I could speak to that so it becomes an
Chair
Unverified
1:19:56
economic question right so let's say for example you're selling a
business and the the person you know asks for your for your books and then the potential buyer is just gonna make an initial decision amm I going to pursue this and do due diligence on this business or am I gonna walk away you know the buyer would not make a purchase decision solely on what the business owner would provide for their books for their finances and so on but it would get them over the threshold and say ok based on what I'm seeing here this is worth a closer look now I'm going to do real due diligence on this thing and if they've had it independently audited I'll
check out the independent audits or I'll hire my own auditor and I'll go in and so for the purposes of this study and based on the amounts of money that were involved and so we have to weigh like the amount of money that folks are getting versus the potential risk they're taking by saying you know this is absolutely 100% we stand behind this this is the initial screen so that a developer could come down and say ok oh look it looks like South Arkansas is a pretty good bet here for potential new or maybe a smaller reactor up
there at A andO and now I'm seeing that there's this initial screen here which is promising now I'm ready to go in and do some real due diligence and pulled the numbersels and put eyes on the documents and so forth to take the next step and and and that company's defense the the contract I have with Blr actually has the requirement in there to have this type of warranty and disclaimer and so forth and when I was working with BLr on that the sentence I have is a lot shorter
I guess I can say this as being a lawyer lawyeryers wear me out and all those words are frankly not necessary right and all it has to do is just say that you know it's provided as is without warranties use at your own risk and that's effectively what all that they said but you know how lawyers are so they have to gum it up with more words but I I think that that's that's ultimately what's happening the purpose of the document is to act as an initial screen if you're going to go forward with a multibillion dollar project you should probably do the due diligence that that backs
did that adequately answer your questionpresentative think so and
Representative Rick Beck
Unverified
1:22:13
don't don't want to make this an engineered to we fight no I I do understand that but
but I I just think that the the I Is said that mainly for the committee to take a look because this information because you did select some sites based upon this preliminary information and and that you know we wouldu it would require additional information to to actually be able to before any decision could be made even even as far
as an additional if we were gonna try to set up a site you know preet up a site we would certainly want to get additional information before we did that yes sir that's exactly right and there'd be very
Speaker 30
1:22:51
detailed environmental reports and so on that would all do that yes sir thank you Mr Chairman my understanding is Mr Murphy do you have a hard to stop at in eight minutes yes sorry about that he need to wrap something
up before we move to other questions Mr. meadows I'm saying that Mr we're gonna
Chair
Unverified
1:23:11
lose Mr Murphy in about 8 minutes and so I thought if folks when had financial questions we might wanna bump
those two committee actually I have one committee member and one noncommittee member in the queue do either of you have a specific question that would be for Mr Murphy that ok uhresentative Rri since Representative la dy man is a member of the committee if you don't mind I'm gonna recognize him now because he may have a question for Mr
Murphy so uhpresentativeladyman you're recognized thank you Mr
Representative Jack Ladyman
Unverified
1:23:45
Chairman. we had a couple of questions that came to mind with the other questions that were being asked senator hickey talked about how much money would be needed in some of these funds that are being set up so I know that Texas their fund is350 million Tennessee's 20 million Utah's 20 million. I know that Missouri
and Mississippi and Oklahoma are looking at setting up funds. I I don't have the information on them how much or if they did that. I know they're also looking at commissioners and then we've got New York and Wyoming and Washington have all done this so that's kind of the res there from 20 million to350 of course Texas is a big state and they they're really going in full born full bore on this but when you looked at the state's surrounding us
did you look into what these funds were actually being used for or allocated for because I think the money is there just to move us forward and and try to get into the economic development because as you said if we're not in this game business is gonna go to other states and every state that touches us I think except Kentucky has a program and we don't so did you look into that what are they using these funds for or is it just available if they need it for permits or what
Speaker 30
1:25:13
so in Tennessee they're using the funds to help build new nuclear infrastructure and they've given outright grants to new
Chair
Unverified
1:25:21
new fuel fabricating facilities because some of the new designs that are coming out don't have the fuel that is needed and so for example I believe Oaklow andandard nuclears are are building a new fuel facility in Tennessee is just granting them outright money for that Texas I'm not real clear on what the the the350 million has been spent on so far in
Texas I have heard nuclear conferences secondhand people complaining that it was too hard to to get the money when I think about the size of Arkansas and I think about the politics of Arkansas the reason why I'm not coming in here and saying the committee needs to go and spend350 million dollars on you know on nuclear stuff is I think that there are smarter ways to get a higher return on the money and those are things that we've discussed earlier Mr
Speaker 30
1:26:09
Murphy I don't know whether you had a comment on that or not but I thought you
Representative Jack Ladyman
Unverified
1:26:14
might but when I started talking about dollars
Speaker 115
1:26:19
well yeah I mean one of the things that states are
Speaker 59
1:26:24
doing too is they're they're putting money into their trade schools they're putting money into university programs to expand nuclear engineering programs or to explain you know the vocational training to to mobilize the labor force to support you know supply chain development as well as is is Mr Metters is has already mentioned so I think it can do a lot of
different things to include support the project directly but there's a lot of things you know that are related to the project that become important you know and you know it's great to say well this creates jobs but are they jobs for people in Arkansas are they are you bringing in labor because you don't have the right combination of skills so you know how do you start developing that you know especially when you're looking at more of an end of a kind strategy you know you have the opportunity to plan over time
to best position the state to capture those benefits so I think a lot of this is you know is it just the nuclear plant to put electricity on the grid or are you looking for it to do more and and and create that project vision and then support it accordingly and I would just add it because I know I gotta go but you know the concerns that were expressed before about uncertainties on the project you know that is where you know I would say that for the state to commit money
you know it needs a capable team to review everything you know to make sure that the lessons learned on all the projects and are being applied to whatever is being done in in in Arkansas to make sure that the supply chain the key stakeholders have experienced that you know there's lots of things that can be done to derisk the project and that sounds nice in theory but then you actually have to go do it and so I think that oversight function which you would obviously expect
the owner organization to have you know the state should take an independent view on all of it to make sure that the project is a good custodian and beneficiary of the money that's being provided by the state in whatever form it chooses to provide it but you know those that lessons learned analysis that project risk register to to really see are we making the same mistakes as before as Mr Metters said you know one of the great lessons learned from the Gentoo fleet is you know standardize everything so are we standardizing or are we doing
something bespoke you know these are all the things that you say yes there are challenges with nuclear but there's lots of lessons learned in scholarship and practical knowledge about how to derisk the projects to avoid these problems in the future and we've seen whether it's you know vogel3 and4 or the units in the uaE things get better as you do more so you know how can you internalize that especially if you're planning to
Speaker 60
1:29:18
do a fleet in Arkansas as opposed to just one unit so thank you very much thank you for that it's interesting that you mentioned
Representative Jack Ladyman
Unverified
1:29:27
workforce development because we have another project enabling resolution to obtain federal money $10 million to develop nuclear engineering program in the state of Arkansas one of our universities and I think that's a corner block for for doing what we're talking about. but thank you for that answer. Just one more so things that we can do in upfront to be ready which is the purpose of this report really so one of them is to have workforce development which we're already
working on and hopefully we'll be able to get that money through a grant. but the other thing you talked about northeast Arkansas and we do have a lot of water up there and I think I think I'm right I saw in your report that we have more excess power than any other section in of the state I think about 2000 megawatts I mean whether I'm right about that but we have we had a lot of industry up there that left offshore so we've got the infrastructure there for that industry that left and so there is a lot of excess power
up there. when you talk about the seismic in the city of Jonesboro about 20 years ago we developed seismic standards I was part of that committee and so if you build a house or a multilevel building in Jonesboro you have to build it to seismic standards so it costs a little bit more from material to build a house in Jonesboro for that reason we build them if in case we do have an earthquake so that kind of technology which
is already developed there in the city could be used or built upon for these plants I would think is that yes yes representative that's that's correct for example it's my understanding
Speaker 30
1:31:12
and you have to forgive me I'm not not a seismic engineer but but the I think
Chair
Unverified
1:31:18
there's some industries that are like factories or manufacturing or so on that's up there that have essentially like some type of rollers that they put the whole plant on so that if there's movement on the
ground it's not causing a collapse and it's my vision there would be something similar to that for a nuclear plant thatd we put
Representative Jack Ladyman
Unverified
1:31:40
up there OKok that's that's for liquefaation OK because in Jonesboro the distance we are from the vault the the biggest problem would be liquefaation so the ground basically is like water waves so if you build the structure so it rolls with that well then it don't som I'm just saying that that technology has been worked on up there and I'm sure there are other things
since that 20 year period that could be improved upon so I think that could be addressed. just one more quick thing the first nuclear plant if I'm right was built in 1954 in Japan or around that time so that's about68 years ago you talked about safety on site so what about offsite safety and I know you know the answer to this but tell the committee how many accidents off site or potential offsite effects have we had in68
years of operation of 80 some odd plants in the US and many more around the world with the exception of
Chair
Unverified
1:32:42
Chernobyl which I don't count since it's illegal to build that plant in the west I believe that answer is I'm gonna say0 but I remember from my nuclear engineering classes one of the first exercises they had us do in in the health physics class was we took the hree mile island accident and they had released some radioactive gas from there after that core melted and so they had us do the calculations let's assume
that all that I believe is the hydrogen that they released and whatever other stuff was in there and assumed that that clump didn't disperse let's assume that clump went over and it just settled on a group of people and continued not to disperse and that group of people all breathed it in and when we did those calculations the number of deaths was0.8. there's an 80% chance that one person gets leukemia from that and that's why I say that when we take a look at when we compare to other industrial activities nuclear is
literally 100 to1,000 times safer than other industries especially when we start taking a look at energy and and fossil fuels
thank you Thank youpresentative uhpresentative Rye you're recognized yes sir thank you Mr Chairman for letting me in yes sir umir based
Representative Johnny Rye
Unverified
1:33:58
on the other states that have been involved in this and also partnerships that have been discussed here today
now we see some350 million then we see some 20 million where do you think that Arkansas belongs in that for starting up a site and how much do you think that a site here in this state would cost so here are my premises in answering that question.
Chair
Unverified
1:34:29
I'll assume that I'm going to get what's called an early site permit under part52 subpart A of Title0 of the code of Federal regulations it's called an early
site permit and that essentially blesses off the site such that when a future build comes in all they have to do is double check the the actual design and when you get that kind of permitting you can get you can either do it for a particular technology or you can get what's called a plant parameter envelope where you just say well I'm gonna you know assume the you know the worst aspects of all these5 or6 different technologies and I'll just get them all licensed all at once now historically that cost has been somewhere in the
neighborhood of 20 to30 million dollars to do all of that because you have to pay for the environmental stuff and then you also have to pay the nuclear regulatory commission for the cost of its reviews and they charge now north of300 dollars per hour and that's how much that has cost historically I don't think it needs to cost that much and the philosophic argument that I have and I look forward to making this having this discussion with the regulator is I now have plants coming out
that are 10 to100 times safer than the already existing safe plants that we have like the current plants that are out have bad accidents once every million years and once every 10 million years the plants I have coming out now have really bad accidents like once every 100 million years during the probilistic risk assessment so I would think that with that additional safety that perhaps we don't need so much specificity in my early site permits seismic reviews or or other
environmental reviews and we could really back down on that cost and I think that this NRC and this administration would go and do quite a bit of common sense toward that so perhaps I mean this is optimistic and maybe I shouldn't be optimistic in nuclear but but this is optimistic but I think that cost could be brought way down I think maybe you could do it for say like 10 or 15 million. and so now the question becomes if we have a private public partnership how much burden do you want do
you want the private part to bear but I think that's what we're looking at just for the licensing or the prepermitting of each site and that's an optimistic view but I think it's warranted
Representative Johnny Rye
Unverified
1:36:59
do you have any idea how long it will take to put this in place from turnkey job yes I'm going
Chair
Unverified
1:37:06
to say 18 months providing that you can get the metweather data in that time there's rules on how much weather you have to
have and this is one of the places where I needed the regulator to to show some flexibility like can I just take the airport's data would that be good enough that sort of thing and the reason why I say 18 months is because the nuclear regulatory commission has been issuing construction permits to new builds in as quick as 18 months from filing to to to approval for them to begin construction while necessarily as part of that they have permission to
build on the site because they evaluate both the site and the tech so that's why I'm saying 18 months there may be some longer lead things having to do with the seismic studies and the weather and so forth thank you for being here
thank you Mr chairir thank youpresentative Fry I appreciate that and I I I was very heartened by what you said that there was positive change at the NRC we look at these things on you know how long does it take to do
something I mean I think they built the pentagon and like you know six months or something crazy like that but there was a war on but we're in kind of a different kind of crisis now when you look at the increase in energy demand not just in Arkansas but everywhere worldwide really I know the 1950s attitude when people still have that mushroom cloud in their mind and they're scared to death of you know and they're starting to get more comfortable with nuclear energy and I think
the public generally is when you have the ottubmanciety and the Sierra Club coming out in favor of of nuclear simply because it's clean I think that's a good sign but the the regulatory process has clearly been proven we know it works we we stick with proven technologies and I really like your term of noac we we do that but this is the problem we can build these things and I know you you
mentioned the problem of of of sourcing all the different components from everywhere in the world that's something else may be that we need to have a national policy to address but it's the regulatory process is clearly the the major stumbling block to that first electron coming out of that plant so uhpresentative Mcruder you're recognized thank you so much Mr Chair. thank you
all for the time and thank you for
Representative Jessie McGruder
Unverified
1:39:46
allowing me to ask a question being that I'm not a
member of this committee do have a question for the chair I know some information has been shared and I may have missed it or it was only for the committee members but a list of the plants that are already operational doing this in the US will be is there any way I can get that information or in the world Mr metors you I'll let you answer and and then I'll
I'll supplement if necessary yes sir Representative Macgruder if you'll give me your card after
Speaker 30
1:40:24
this I'll I'll point you to their directories and they're very reliable directories on all
Chair
Unverified
1:40:28
of that information and all'll I'll send you an email I'll get all that information to you thank
Representative Jessie McGruder
Unverified
1:40:35
you so much and also wanna piggyback on what Representative Ladyman was saying being in one of those seismic areas is there going to be any extra costs that goes that the taxpayers or the people of the community are having to pay with them being in one of those areas because we have
several areas in East Arkansas northeast Arkansas that are part of that so it depends on how
Speaker 30
1:41:00
the the project financing is structured there will be additional costs to the project and therefore to the extent that taxpayers are footing
Chair
Unverified
1:41:06
the bill for the project that will be an additional cost to the taxpayers but I mean it may be that the financing comes in it's entirely private or you know something along those lines but I I think that the short answer to your question is yes but it would be indirect through the project and assume we we look at this it's
so easy to talk about and and you you make a great question therepresentative McGruder but I look at this well what's the government doing what's the utility doing well the consumer whether they're doing it out of their account they pay their taxes out of the account that they pay their utility bills out of the consumer that it's individual citizens are paying for this whether they've taken it out of their left pocket or the right pocket you know could be argued but but the fact is that there's this is they are ultimately
consuming the product and ultimately paying for it so we moved numbers around we move responsibilities around
but but ultimately those consumers are are paying for it do you have a question senator Mcee thank you Mr Chairman. I just kind of wanted to address that because I
Senator Matt McKee
Unverified
1:42:14
think the goal here for the early adopters is to have private investors build these things first to get us to theOacC prices to get us to the point where we're not running
into cost overruns like we've seen in Georgia that's the goal that's we're not the utilities are not gonna build these for at least they're not going to look at it for at least another4 or5 years if not 10. so until we get to thoseOAC prices it's com there's no way they could get it through the PsC right they won't be able to justify that in rates so the goal here is to look at ways to be private investors in Arkansas or the federal government to start these builds so that we get to thoseOacC prices so that we don't have to deal with the cost overruns and things like this when they're building
102,050 of these at a time around the country because we will have those needs that's when the prep the utilities will be looking at this so that's when the consumer will be paying for it hopefully not in their taxes but in their rates absolutely when we reach thoseOacC prices that's the goal in in my mind anyway wouldn't you agree yes senator, I do agree and while they may be
Speaker 71
1:43:21
paying for it it would it would also end up though being lower cost power because there'd be more power
Speaker 30
1:43:26
available to buy senator Mcee thank you for that
and I think it's important that we we
we learn lessons in other totally different areas of life I just
had a recent situation where I saw a public project nothing to do with energy but when I
asked one of the officials about the cost of it my eyes bugged out by the dollar figure and I realized that you know it was a one off thing and there's a lot of money to be made by engineering firms and
construction companies and I I like both of those outfits I like engineering firms and construction but you've heard the old saying that if it's if if if you're a hammer everything looks like a nail and if you are are doing certain things you're you have an economic interest in it and I I I wonder over the history of this my whole about my whole lifetime now how many of these engineering costs and studies and all this was because someone in a position to influence it
needed to make some money wanted to make some money but if you've proven the engineering then you know as
I I said to someone the other day if we built in this case we were talking about housing if we build houses if we built cars the way we built houses nobody could afford a car and we've pretty well built nuclear power plants that people could hardly afford but considering they last a long long time and really don't use much to operate it it plays
out in the long run but you're your your front load cost is like buying aRollsRoyce and so we're we're it's a matter of balancing those things so I I think we've done a good job today of airing that out and and your study will give us something more to to bite into on that Mr mets cohair shepherd do you have anything to add on this OK we'll move on the first of all I I guess I should ask
MRogers if you had anything to add we've sat quietly and patiently sir was
Speaker 39
1:45:34
was here to just answer if there were any additional questions in in particular with the water availability study that we thank but thank you for
being here and if we have any later the staff will we get in touch with you get those answers anything you'd like to wrap up with Mr. Meadters before we move on no sir thank you very much for
Speaker 69
1:45:51
your time and I appreciate the committee's time and it's interest. Thank you. I appreciate you and
you dismissed I'll I'll call our friends from the department of Energy and Environment if they want
to come forward I don't think so take for just a moment
I did not know the secretary was going to be here but I'm glad he is and jet
engines too yeah that's right yeah good morning Mr Secretary would you identify yourself for the record and and your colleague yes Shane corey
Speaker 172
1:46:30
secretary for the Arkansas Department of Energy and Environment and I brought as representative beck would call my legal eagle to the table as well
Speaker 173
1:46:40
Good morning Amanda Land chief counsel Energy and Environment thank
you M Lamer Secretary, you recognize you have a
Speaker 172
1:46:47
short statement sure thank you you know we've simultaneously filed a report or at least a letter report as the original act as you all recall called on us to do the study upon receipt of funding as we went through the process I thinkblr advised that y'all couldn't fund us to do the study so you all as part of ALc funded the study yourself but there was still technically a
reporting requirement from the department of Energynvironment that was due 15 months after that date so basically the letter just says that that we never received funding we did not engage the funding you all did but to technically s at is f y the reporting requirement we submitted the letter it's as simple as that and committee we we have
received the letter and it's exhibit d I believe is it not right Micchelle and in everyone can look at that well without objection we'll accept the letter and is is satisfying
the status of report thank you so much
thank you Mr Secretary M La. any other question or business to come before the committee if not we stand adjourned
Agenda
A. Call to Order
B. Consideration to Approve June 25, 2026, Meeting Minutes [Exhibit B]
C. Arkansas Nuclear Feasibility Study – Presentation of Final Report [Exhibits C1 – C5] - Brian Meaders, General Counsel, EXCEL Services Corporation
D. Arkansas Department of Energy and Environment (DEE)- Act 707 of 2025 Report [Exhibit D]
E. Other Business
F. Adjournment
Documents
No documents posted.
Speakers
Senator Mark Johnson Chair
Unverified
Speaker 4
Representative Jack Ladyman
Unverified
Speaker 30
Speaker 31
Chair
Unverified
Speaker 37
Speaker 39
Speaker 44
Speaker 49
Speaker 53
Speaker 48
Speaker 54
Speaker 59
Speaker 45
Speaker 80
Senator Matt McKee
Unverified
Speaker 71
Speaker 76
Senator Jimmy Hickey, Jr
Unverified
Speaker 110
Speaker 115
Speaker 60
Speaker 109
Zach Gramli
Unverified
Representative Richard McGrew
Unverified
Representative Rick Beck
Unverified
Representative Johnny Rye
Unverified
Representative Jessie McGruder
Unverified
Speaker 69
Speaker 172
Speaker 173