Energy - Joint
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- October 4, 2026
Members if you would all take your seats we'll get started in just a
Speaker 4
1:43
moment yeah now where's the hand me that people's name on it yeah yes ma'am just sit it right there that's fine
yeah yeah all right joint committee on energy come to order uh welcome everyone uh we've been looking
forward to this presentation and we will assume the computers will be worked out in a moment Michelle I mr. meters feel good 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 said moved by Senator McKee second but you did you second that thank you representative McNair all all in favor of approval of
minutes say aye opposed
Speaker 17
2:47
thank you I want to make a quick announcement, BLR
will post the electronic version of the report
from Excel online immediately, so anyone that's either in the audience or wants to follow along online or whatever could get that and I'll recognize you in just a moment mr. Myers also joining us on and he'll be attending my video is mr. Paul Murphy and I understand that Natalie Rogers will also in it be in attendance does
she would she need to come to the table mr. Myers and here she comes okay thank you miss Rogers and I will recognize now representative ladyman who's going to introduce our witnesses today representative Jack ladyman
Representative Jack Ladyman
Unverified
4:25
district 32 thank you mr. chairman well I'll let them introduce herself a little bit later but I wanted to give a little background about what has been done by mr. metals so committee members if you recall the nuclear in nuclear energy feasibility study was authorized by Act 707 of 2025 it implemented or approved a study to be completed by mr. Brian Meadows of Excel Services
corporation the study was due in 15 months after authorization of the act and was authorized on 4-16-25 study was completed before the july 30th 2026 deadline the report consists of 313 pages the purpose of the study uh 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 study nuclear reactor siting. 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 siting 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 micro-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 exists 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 leader of the House the minority leader of the House and chairpersons of this committee. Mr. Brian Meadows with Excel 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 do you represent? Please enter deep
both of you introduce yourselves for the record. You'll have to turn your
Speaker 30
8:01
mic on Thank you representative lady men and thank you Senator Johnson is
Speaker 31
8:06
it mr. Chair. I want it's not mrs. Chair. So
My name is Brian Meadors I'm an Arkansas native.
Chair
Unverified
8:16
I grew up in Fort Smith and I'm an Arkansas native. I grew up in Fort Smith I've had family and for 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, it's good work to do, but on the other hand, I'm doing good while doing work. Because I very much believe in the promise of nuclear industry and its demonstrated safety and emission-free baseload power.
And I talk about that quite a bit in the report, especially in the final version. And so I'm happy to be here
today. If I could interrupt you, Mr. Mayor, I want your colleague to introduce yourself. then i'm going to recognize you for your full presentation
Speaker 37
9:03
of course yes um may i introduce her please for
Speaker 39
9:09
the record i'd rather she introduce herself thank you i'm natalie rogers i'm a civil
engineer with half associates okay thank you mr roger mr mares you are
recognized and i assume your your uh powerpoint is available when and if you're ready to to begin with that but you're
recognized 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're recognized, Mr. Patterson. Thank you, Senator Johnson.
Speaker 31
9:37
So I think I'm going to start first with a
Chair
Unverified
9:42
little housekeeping. The committee 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 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 going to talk about how new nuclear is both feasible and advisable in Arkansas. First of all,
The state needs the energy. There is rising energy demand. Energy is projecting a 35% increase over the next five years, and longer-term projections show that power needs will double. I know that AECC has received about 4,000 megawatts of prospective 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 are 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 answer is 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 bring us something and we'll let you know if we 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. Finally, state law needs only modest changes. You know, unlike, say, Illinois, which had a moratorium, or Minnesota, I believe, also had a moratorium on their 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 showstoppers currently. There's some things that y'all could do to make it easier, but there's no showstoppers.
The overall recommended course that I have for this state is, I don't think that it's in the taxpayer's interest of Arkansas. to 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 of 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 pre-permitted for new nuclear
And then at that point, what will happen is instead of building a first-of-a-kind reactor that's going to 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 nth of a kind, then at that point, you already have a pre-permitted site and you can just start building on it. 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 slide three, go in a little bit more detail. Power demand in Arkansas is surging. I'll walk through all of this. Also, we have some coal plants shutting down in 28 or 30. There's no question that new energy is needed. Okay. On to slide 4. So nuclear fills the energy gap better than any other alternative.
The capacity factor of nuclear is 91%. And what that means is, 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 25%, 30%. 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 1,000 megawatt nuclear plant as compared to 75 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 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 or some sort of import penalty on materials that are made with what they deem 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 had 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. I don't have to have huge tanks of oil there. The fuel can just be ready to go. You can get 18 to 24 months ready to go stockpiled up. Nuclear is safer than the alternatives. And in the final version of this report, I put in a pretty good graph.
When I take the total amount of terawatt hours, like the amount, you know, like essentially per capita, but for energy, nuclear has one of the lowest death rates as compared to oil or gas or coal, which is 10, 100, and 1,000 times. Like coal, it's like 1,000 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 Nuclear Energy Institute, has done studies on this, and they find that some of the biggest supporters of nuclear are the folks that actually host it. The people who are there know that it's safe. It provides lots of permanent positions. Then, of course, you get the indirect economic benefit of the workers who work there, and they're substantial contributors to the local economy and the tax base, for example, A&O in Russellville.
I'm on slide six. I mentioned this before. I don't think Arkansas, about 90% of the utilities, and my understanding is that Intergy is among them, are taking the position that they don't want to go first into 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, their third, fourth, or fifth 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 answer is what I mentioned earlier about the pre-permitted sites. And I talk about that on slide number six. On slide seven, these are the candidate areas that we took a look at for possible siting.
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 Little Rock. Then southwest Arkansas near Camden. I could probably extend that number four a little bit over to also include Little River County near Millwood Lake. I also took a look at Phillips County and up in Craighead, Mississippi. And a lot of that was driven by the transmission constraints.
Ultimately, and Natalie would be in a position to speak to this, both the water and the transmission constraints don't make Flint Creek a very good fit. And so 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. I know there's some Intergy folks here in case people want to have questions for them,
and I'm not going to speak for Intergy, but, I mean, that is a fact that there are transmission constraints, so you have the additional cost of expanding transmission. However, with that exception, A&O is a really good place to put more nuclear. It also begins to address the problem of what happens when the existing plants ultimately retire. Because that's going to 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 near Camden, 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 air-cooled 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 finally, five and six for Phillips County and Craighead, Mississippi, 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 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
Speaker 30
22:14
to somewhere else. Slide eight. In addition to the possible sites on
Chair
Unverified
22:20
slide seven, there's other 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 modular reactor where there is 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 branches have not gotten together to figure out a path forward.
What I do know is that the naval reactors people who put the reactors on the submarines and aircraft carriers are not involved in the land-based reactors. They just don't want to have anything to do with it. I understand that. I think that west and southwest Arkansas absolutely warrant further study. I think that's a great area. That's a population that really wants new nuclear and wants new industry. And then also, there's been recent changes to the siting 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 module 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 video here. Is he not? Okay, something must have...
Speaker 44
23:47
I'm on. oh you are good okay the video Brian I can
can see and hear me well so I can hear you we can 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
Chair
Unverified
24:15
without them I'm so sorry I I must have miscommunicated. Paul Murphy was not going
to have separate slides. Well, it's okay. I apologize. Mr. Murphy, would you like to identify yourself for the record, and then we'll
Speaker 53
24:27
go back to Mr. Meriters? Sure. Paul Murphy is part of the team that put together the report.
Speaker 48
24:34
I don't know what more you need, but happy to give you some background on my expertise if that's helpful. Just you
and your name and your company, and then we'll go back to Mr. Meriters. Okay, Paul
Speaker 54
24:47
Murphy, Murphy Energy and Infrastructure Consulting. Thank you, Mr. Chairman. Thank you, sir. Mr. Myers, you can continue now. We're on slide number eight.
Speaker 30
24:53
Yes, sir. So I'm moving to slide number nine now to talk about financing. Paul, do
Chair
Unverified
24:57
you want to cover slide number nine, or do you want me to do it and you just handle questions?
Whichever you prefer. Why don't you go ahead and handle slide number nine, please. Talk about
Speaker 53
25:11
the financing. That way we'll have the expert doing it. Sure. Well, thank you all for having me. Thank you for your interest in the topic.
Speaker 59
25:19
You know, when we looked at financing, 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 over 400 plants operating in the world today. Many more have been 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 in 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 profiles change 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 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, government support is necessary. And that can take a lot of different forms. It's going to 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 when you think about the various stages, sourcing government funds becomes very important. Sourcing government programs becomes very important. Brian 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 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 possible export credit finance from other countries, recognizing that the supply chain is global. So when you think about Westinghouse and GE Itachi, a lot of their supply chain comes out of Japan and Korea.
So that opens up financing opportunities. We look at the Department of Energy funding that's available that becomes very relevant when you get into construction. And when we think about sort of this is a problem-solving exercise, two of the things 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 X, what if it's X plus 20 percent? Where's that 20 percent coming from?
And so we need to solve for that in the financing structure. So that's why there's that reference to cost overruns. Once you get an operation, very different story. And I think that the message and part of the financing is that the economic case has to support the financing. And 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 credit-worthy power purchase agreements, which also ties into a concept that we have in the report, which is 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, where they're the offtakers because they want
Speaker 48
31:04
the baseload clean electricity and possibly the high temperature steam from the reactors to support their industrial processes and industrial decarbonization. for competitive purposes, that
Speaker 59
31:15
becomes very interesting if you think about developing the
project, the capital P project
Speaker 48
31:21
is all of it, not just the nuclear plant. And so that gets into more of an economic strategy, an industrial strategy, an export strategy for the state,
Speaker 59
31:31
which can get really interesting 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, recognize, of course, that there is government support that is going to be
needed, but to think of it as being, you know, a surgical 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 in development and construction then when you're in operation the project's de-risked
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 across all
Speaker 48
32:36
three phases and try and target the support to match the challenges and opportunities of that phase.
Chair
Unverified
32:47
Brian, back to you. Thank you, Paul. Moving to slide nine, the legislature can, of course, support these different stages. Already on the books is the Act 373 of 2025, which allows utilities to have the, it's called CWIP.
I forget what it stands for. Construction
Work in Progress. Yes, thank you. I have my bill here, so I can tell you what it
Speaker 45
33:16
is for this month. Yes, which effectively allows
Chair
Unverified
33:19
the utilities to bill the ratepayer as the asset is being built, which is tremendously valuable because it reduces the capital cost so you're not having to pay for the interest for the money up it reduces the
capital cost to the utility sorry to correct you
Chair
Unverified
33:36
mr matters i just i had to get that one i
understand center um i i think we're going to call that one beyond
Chair
Unverified
33:48
the scope and i'll allow you to stay in your lane i apologize for interrupting Don't you go ahead, sir. I want 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 are another possibility, or assistance for securing a long-term buyer of the power. The last one, I'm not sure how much assistance really is 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 czar or a 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 been sitting on the book since the 1950s, 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 Johnson talking about staying in my lane, I'm not going to 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 really pro-nuclear, and then nothing really ever happened with that. The changes that I do propose in the proposed legislation that I 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 federal programs. Expand the atomic coordinator's duties and go ahead and get that role filled and give that person a 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 going to do private-public partnerships with identifying sites and getting them pre-permitted, some money will be necessary for that.
There's 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, the company is still being regulated in 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 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 exceed 50 megawatts, and they have to
get some sort of certification or environmental thing or 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 modular reactor that has like three 30-megawatt modules? Is that over the 50 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
I would I want to make sure that people who really knew what they were doing we're doing that um 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 happy to take questions thank you Mr. Meadows uh appreciate the work you've done on this and uh we're
we're going to open it up if people are already getting in the queue I did want to ask you a couple things
to start uh the the first is that uh of the and I love the NOAC the uh a good basically we're talking proven technology relatively proven technology versus cutting edge technology which in this uh business I presume means slower approval at the regulatory level is that
a fair way to describe the uh uh uh yes senator i think i'll
Chair
Unverified
38:57
do what they what they teach you to do in
improv i'm going to yes and yes and i would i would add to that proven economically of course right um because the the technology in my opinion is is really the the least fuzzy thing about the new bills like it's going to 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 uh the uh the sea
whip which we've already brought into the discussion uh and i i did bring literally brought my electric bill because it's already on there uh and that's not any nuclear plant that's simply the energy portions, a portion of the coal plant. 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 CWIP, and without re-debating the bill we passed last year,
which I voted against, and many of my colleagues here, we were all over the place on that thing, But in my opinion, it changes substantially the system we've had for privately owned utilities, investor owned utilities. Instead of you go out into the capital markets, you get the money you need, whether it's selling stock or borrowing the money. And then when the facility is producing, then just like when 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. But now we're shifting that up front cost 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 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 this were a co-op instead of an investor-owned utility, we'd be members and we'd be equity owners, so to speak, in this. But in effect, I've got the, I'm not an equity owner in Entrygy, and I'm not picking on Entrygy. They are just the particular investor-owned utility that's serving our state.
Others are in a similar boat on this. But in doing this change, is there enough financing capacity with the CWIP to take care 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 energy project in Russellville, Or if we do with SMRs or if we kind of spread the love around different ways.
I know that, and that's a thing that's a subject, and I'm for the small ones because I think once we get that standardized thing, you're pointing out how in one of your slides it significantly reduces the long-term cost. But are we looking at overburdening ourselves in the financial sense if we use the CWIP 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 100 years?
Speaker 80
42:57
Could you respond to that? Paul, do you want to take this
Speaker 53
43:09
one? Sure. I'm happy to, but also you're there. I thought this might be more in your way to it. Go ahead. So, Senator, great question. And I'm old enough
Speaker 59
43:17
and long enough in my career to proudly say, I don't know. And the reason I don't know is because you would have to really model everything out that the state is going to 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 see, you know, like the UK has done their regulated asset base, which is just kind of a takeoff on what we've done in regulated markets in the United States for years. So, you know, it's helpful, you know, the more calls on 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 fall on economic impact.
When you model that over 80 years, the numbers are staggering. We've done that for other states, other countries. I think from a policy perspective, when you consider electricity as critical infrastructure, and then you look at those benefits that are created, which it's very important 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, in 30 years, look at what this plant's going to do. Everybody in that boardroom will be dead in 30 years. So it's not an audience that thinks along those timelines. But I think when you do the modeling, it comes down to a very simplistic, 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 I 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 coming back to 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 all
right thank you mr. Murphy 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 go 40 miles south into Richland Parish Louisiana and Metta is putting in the I would call it 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 I mean 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 energy service area as well are we and while it's easy to say well we're Arkansas we're just going to be concerned what's going on here but I remember I'm old enough to
I remember a few years ago when Intergy 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 just saying if there's enough power to serve the Meta Data Center in Louisiana, are we okay to look at this from a we're in Arkansas standpoint
versus system-wide for Intergy or even anything else that's in our transmission service area?
Chair
Unverified
48:07
Right. So, Senator, you're correct in that you can't just focus on just Arkansas. The fact that you have such a huge load just
Speaker 30
48:16
over the border will affect the energy prices. And I believe that's all in MISO, which is the transmission organization that runs that. And electrons don't
Chair
Unverified
48:26
pay attention to state lines. And so that's going to run up the price of electricity. Nor do grid operators, thank
God. Some people would have been freezing to death in the dark a few years ago if it weren't for that.
But, okay, I think we don't have to go into it. We have several people in the queue, and we'll start. Senator McKee, you're
Senator Matt McKee
Unverified
48:51
recognized. Thank you, Mr. Chairman. And first off, I just want to say thank you all for the work that you've done. Excuse me. Obviously, this is a very comprehensive report. You put in time and effort. We appreciate the information that we have. But 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 seed 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 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 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 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 in 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
Speaker 44
50:16
yes so i think a good analogy to that senator would be
Chair
Unverified
50:22
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 U.S. 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 that's where the business is going to go. 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
Senator Matt McKee
Unverified
51:48
states. Follow-up, Senator. I 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 these certifications that will allow them to compete in that market. We're talking about tens of thousands of jobs 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
Speaker 71
52:19
have. Yes, and I think I want to add to that, because it's what I
Chair
Unverified
52:25
added to, in between the draft and the final, I've been thinking, 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, say in 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 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 stuff. 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 of what you're talking about 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 NSTAMP, then that would allow them to go into the market without having to that catch 22 issue okay it's okay if i go one more
Speaker 76
53:46
be quick yes sir i can come back to you later i would a lot in
Senator Matt McKee
Unverified
53:51
the queue i appreciate that answer i would i would never presume to speak for our investor on utilities but i would i think it's probably safe to say that uh 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 NOAC builds where the economics is proved and the technology is there, obviously they want to be involved in that
process. So with respect to some of the legislation that you've passed, 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 part of those early builds that haven't reached the NOAC place where you know Arkansas is not Texas we don't have a hundred billion dollars to stick in a fund and start throwing it at different developers 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 uh all of that helps
Speaker 45
55:00
senator uh and i think and it's a classic political issue if i just if you
Chair
Unverified
55:05
just throw money at a problem 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
Senator Jimmy Hickey, Jr
Unverified
55:16
okay thank you sir senator hickey
Chair
Unverified
55:21
you're recognized thank you mr chair one
Senator Jimmy Hickey, Jr
Unverified
55:28
question just to view 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 technical issue senator that came up from the Secretary of Energy and Environment because the original legislation was directing them to implement this 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, the committee 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-chair, Representative Shepard, if he can encourage that analysis. I think so. Okay. I
Senator Jimmy Hickey, Jr
Unverified
56:20
just wanted to make sure we're not going to ask the Bureau or anything like that to start drafting any type of legislation for
Speaker 110
56:26
the session or anything like that or to vote
as a committee no okay certainly you and i and any other person's going to be here in 2027 could work on that senator but i hope we at least talk to each other about uh i don't think we need 18 bills on
this subject this committee wouldn't would be meeting an awful lot if we did but i appreciate you asking that
Senator Jimmy Hickey, Jr
Unverified
56:48
thank you sir and some of this and again i understand 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's going to 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 1 million 10 million 100 million 500 million what
what's uh we got to have an idea of a ballpark on
Speaker 59
57:25
the classic lawyer answer it depends um 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 eight figures to the left of the decimal point so you're probably going to be in the tens of millions of dollars um you know and again you
would set that for a certain amount of time and then it would be taken out um 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 to your time period something like that but you know the it's a great question it's But sadly, it depends if you're talking a large reactor, 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 two to four years before your construction license, which is really difficult for developers to carry that. And then as you get closer to your construction license, you're going to be bringing those other sources of financing, which would then take out
Senator Jimmy Hickey, Jr
Unverified
58:34
the bridge. Okay. So with a bridge loan like that, would you foresee that the state would have like a first lien position in some type of marketable assets? Or are you just talking about 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 lien position?
how do you see that how would you see that
Speaker 115
59:03
to be structured you know i i think i would first look to
Speaker 59
59:07
who or who's going to be the owner of the project so you know if it were entergy for example um you would be you know you would evaluate it as a corporate credit and you would expect it to be backstopped in that fashion um 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 at that point, the way your question moved, I think, is exactly correct. If they are not well-capitalized and you're sort of helping them along, you want to take security in the project. Now, you certainly don't want to have security in an operating nuclear plant. That gets very messy. But, you know, security in the site, security in, 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
Senator Jimmy Hickey, Jr
Unverified
1:00:28
and then act appropriately right and i think i'd agree with you there and 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 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 seems 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 going to have this project that goes along.
we get down to the end of this thing and uh well we're 200 million dollars over and to finish it out the state's got to step in 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 uh i will definitely
be pushing never to do something like at. Thank you. Mr. Chairman, would
Speaker 60
1:01:43
you like me to just address that because it's a great point?
Go ahead, Mr. Murphy. By the senator. You know, senator, you make a great point.
Speaker 59
1:01:53
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 point of it is, of course, It's not charity. You would heavily structure this. You 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 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 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 questions of the technology 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, 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 EPC 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, 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 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
Speaker 48
1:04:09
can be addressed. I also say it is a valid concern and will need to be a focus going forward, for
Speaker 60
1:04:15
sure. Great. 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 going to do is have the taxpayers of the state of Arkansas hold in the bag
Speaker 109
1:04:32
if something goes wrong in this whole
process. Thank you. Let's see. Representative Gramley, you're recognized. Thank you, Mr. Chair. And I
Zach Gramli
Unverified
1:04:47
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 $10, $20 billion over.
And that was a first of a kind, so we wouldn't expect that much. but we could 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 we go forward. And I guess just some other, just really two broad things. First off, we said Intergy doesn't want to be the first. Who should we be watching to be the first? Are we looking at Texas, California? Who's going to be the first to do this stuff, if not us? I would look more toward
Chair
Unverified
1:05:34
the vendors, which vendors are going to be first.
So the AP1000s, which are run by Westinghouse, already has the Vogel 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 is 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 called Kairos Power that's building some prototypes up in East Tennessee at the Oak Ridge site.
There are several others with other Department of Energy sites, and I don't mean to leave any of these vendors out, 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, okay, they've built it. They have a mature supply chain. 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.
Zach Gramli
Unverified
1:06:46
Okay. And then I guess, you know, I'm looking at, like, internationally, we have places like China making 30 right now are in construction, more on the way. Where's our, like, do we have an American-based supply chain? Are we going to be bringing stuff in from all over the world? And I guess with Senator McKee's question, like, how do we bolster Arkansas to help build
Chair
Unverified
1:07:07
reactors? So currently you can't build a reactor without relying on international providers. So, for example, reactor forgings come out of South Korea. I think on one project I was on, the main coulomb pumps were coming out of Italy.
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 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 think that you can get those certifications. That's measured in the hundreds of thousands of dollars, like low hundreds of thousands of dollars, like one or two.
Zach Gramli
Unverified
1:07:54
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 in one of your slides I 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. Yes, Representative, we
Chair
Unverified
1:08:16
sure could, and I think 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 for that. Some of the techs can actually put up with the expected seismic issues up in northeast Arkansas, but others can't. But as they become proven and become more reliable, I would want to revisit that siting decision. Yeah, if Japan can build them,
Speaker 128
1:08:51
I don't know why. We couldn't. All right, thank you.
All right, and I might add, as you know,
Mr. Miller, we've got some serious energy consumers in Mississippi County with the steel industry. 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 going to need power in that area, New Madrid fault notwithstanding. And I'm one of these people that I've read the history of that area in 1811,
and I can't imagine what would happen if we had that kind of an earthquake again, but you have to factor that in. So I was grateful that you covered that in the study. representative mcgrew you recognize thank you mr chairman in
Representative Richard McGrew
Unverified
1:09:44
the demand that's increasing 35 i think that that figure came from energy and did y'all look at did you look at that at all 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 uh discussion about what type of reactor might be preferred is it 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 know energy is but Anyone else in that?
Speaker 31
1:10:30
So I'll address those in order. I'll address those in order, Representative. Thank you for
Chair
Unverified
1:10:39
the question. So I cited Intergy, and I believe I remember correctly. I think it came from their IRP, but it came from some official Intergy 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 500 megawatts. So you can build maybe a 300-megawatt reactor there before you upgrade the transmission. But if you go over that, you're going to 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 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 going to want to use what's called a high temperature gas reactor because it operates it's 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 okay 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 Engineers requires a backup and maybe my backup is an air-cooled condenser so I would want to select that kind of technology or I'm putting the technology in northeast Arkansas so I want to 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
vogel ones i know that tva is building new nuclear mainly over there at oak ridge 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, OG&E, Oklahoma Gas and Electric, which 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, we're happy to take power from nuclear, but we don't want to get into the nuclear business. And it's my understanding, though, 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.
Representative Rick Beck
Unverified
1:14:09
Thank you, Mr. Chair. My question is a little bit about, I want to double down on the cost overrun aspect of it.
I sketched that. I'm glad that 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, but are we looking at cost overruns for SMRs to be the same as the cost overruns for what I would call the one-of-a-kinds? Almost all of our light water reactors are one-of-a-kind reactors.
They were designed on site. They were built on site. The SMRs are going to be, for the most part, as we've been promised, they will be pre-manufactured and just assembled on site. My question is, from the financial 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 type of reactors because they're really nothing alike. So
Chair
Unverified
1:15:21
this is my opinion, and I can't point to any studies or research to back this up,
but as a veteran of the Vogel Project, I formed opinions about first-of-a-kind builds. And it is my opinion that on a first-of-a-kind build, I personally just expect it to cost triple, whatever the salesmen 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 want to go into what happened at Vogel, but, you know, one could certainly get underneath those. But if I were a policymaker, a decision maker like yourself, that's the expectation I would have going in of what I would be preparing myself for.
So to answer your question about, you know, how does the overrun on a first-of-a-kind SMR compared to, you know, a full-size reactor, Well, you know, if a full-size reactor costs $6 billion and it may be triple the price, so it comes in at $18,000 like the Vogel projects did for each one of those units, what if I have an SMR that's supposedly $2 billion but it's a first-of-a-kind build? Well, I'd be bracing myself for a possible $6 billion cost for that because that could happen on the first-of-a-kind build.
What's interesting, and this is why I feel very strongly about the NOAC strategy, is that even on the Vogel project, like that first, you know, you had Vogel 3 go first, and then trailing about four or five months behind it was Vogel 4. There's about a 30% reduction in the cost on Vogel 4, on Vogel 3. That's how rapidly that goes down. Now, it only works if you're doing exactly the same kind of plant. And so you've got to be like, and I know, Representative, you're an engineer,
so 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 going to build this plant the same way. And that's how
Representative Rick Beck
Unverified
1:17:18
you actually get the cost savings. Well, I appreciate that. Now, I have one other question. And trust me, I am very, I do believe that I'm more of a SMR type person. I do believe that's going to help us out because 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 it is a concern I think that 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 at the user's onerous. I'm not going to mention the companies. makes no responsibilities warranty expressed or in implied regarding the completeness,
the accuracy, the currency, the suitability of the information, or the conclusions in this report. And multiple vendors said that the reports were, they didn't check, It actually says that they didn't check all of the independent information that was given to them. They just basically rolled it out there.
One of the vendors even recognizes Excel as the client and says that this is only for Excel's purpose and that if they share it with a third party that they have to have prior approval to doing that. I don't know if you have that already or not, but that's one of your vendors. But that vendor also almost used the exact same information as far as, like, you know, this information is kind of out there. We didn't verify all the independence. And as an engineer, I can understand that.
We're kind of at a top level here. We're kind of just looking around here a little bit. But these disclaimers basically, you know, the legal eagles got a hold of it, and they basically just said, you know, use it if you want. But if anything's wrong or like that, it's not on us, it's all on you because you used this report. And 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 causing the question, I should say,
the accuracy or the completeness of this information in these reports. Yes, Representative,
Chair
Unverified
1:19:51
if I could speak to that. So it becomes an economic question, right? So let's say, for example, you're selling a business and the person, you know, asks for your books. And then the potential buyer is just going to make an initial decision. Am I going to pursue this and do due diligence on this business or am I going to 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, okay, 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 win 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, okay, oh, look, it looks like South Arkansas is a pretty good bet here for potential new or maybe a smaller reactor up there at ANO, 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 pull the numbers myself and put eyes on the documents and so forth to take the next step. And in that company's defense, 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 VLR on that, the sentence I have is a lot shorter because, and I guess I can say this as being a lawyer, lawyers 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 they said. but you know how lawyers are, so they have to gum it up with more words. But I think that 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 backs it up. Did that adequately
Representative Rick Beck
Unverified
1:22:08
answer your question, Representative? Yeah, I think so, and I don't want to make this an
engineer to clarify. No, I do understand that, but I just think that I 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 that it would require additional information to actually be able to before any decision could be made.
Even as far as an additional, if we were going to try to set up a site, you know, pre-set up a site, we would certainly want to get additional information before we did that. Yes, sir. That's exactly right.
Speaker 30
1:22:46
There would be very 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 stop in eight minutes? I do. Okay.
Sorry about that. Does he need to wrap something up before we move to other questions?
Chair
Unverified
1:23:05
Mr. Meadors? I'm saying that we're going to lose Mr. Murphy in about eight minutes, and so I thought if folks had financial
questions, we might want to bump those to the top. I have two committees. Actually, I have one committee member and one non-committee member in the queue. Do either of you have a specific question that would be for Mr. Murphy? Me. Okay. Representative Rice, since Representative Layton is a member of the committee, If you don't mind, I'm going to recognize him now because he may have a question for Mr. Murphy.
So, Representative Lateman, you're recognized. Thank you,
Representative Jack Ladyman
Unverified
1:23:40
Mr. Chairman. Well, I had a couple 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 is $350 million, Tennessee's $20 million, Utah's $20 million. I know that Missouri and Mississippi and Oklahoma are looking at setting up funds.
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 range there from $20 million to $350. Of course, Texas is a big state, and they are really going in full bore on this. But when you looked at the states 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 try to get into the economic development. Because as you said, if we're not in this game, business is going to 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 is it just available if they need it for permits or what so in
Speaker 30
1:25:10
tennessee they're using the funds to help build new nuclear infrastructure and they've given outright grants to new new fuel fabricating
Chair
Unverified
1:25:18
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 Oklo and Standard Nuclears are building a new fuel facility, and Tennessee is just granting them outright money for that. At Texas, I'm not real clear on what the $350 million has been spent on so far in Texas. I have heard at nuclear conferences, secondhand, people complaining that it was too hard 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 spend $350 million on, you know, on nuclear stuff is I think that there are smarter ways to get a
Speaker 30
1:26:04
higher return on the money. And those are things that we've discussed earlier. Okay. Mr. Murphy,
Representative Jack Ladyman
Unverified
1:26:09
I don't know whether you had a comment on that or not, but I thought you might. But when
Speaker 115
1:26:15
I started talking about dollars. Well, yeah, I mean, one of the things that
Speaker 59
1:26:19
states are doing, too, is they're putting money into their trade schools.
They're putting money into university programs to expand nuclear engineering programs or to expand, you know, the vocational training to mobilize the labor force to support, you know, supply chain development as well, as Mr. Meadows has already mentioned. And 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, it's great to say, well, this creates jobs, but are they jobs for people in Arkansas? Are they 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 create that project vision and then support it accordingly?
And I would just add it because I know I got to 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 de-risk 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 really see, are we making the same mistakes as before?
As Mr. Metter said, you know, one of the great lessons learned from the Gen 2 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 and scholarship and practical knowledge about how to de-risk the projects to avoid these problems in the future. And we've seen whether it's, you know, Vogel 3 and 4 or the units in the UAE, things get better as you do more. So, you know, how can you
Speaker 60
1:29:13
internalize that, especially if you're planning to do a fleet in Arkansas as opposed to just one unit?
Representative Jack Ladyman
Unverified
1:29:19
So thank you very much. Thank you for that. It's interesting that you mentioned workforce development, because we have another project enabling a resolution to obtain federal money, $10 million, to develop a nuclear engineering program in the state of Arkansas at one of our universities. And I think that's a corner block for doing what we're talking about. But thank you for that answer. Just one more. So things that we can do up front 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'm right. I saw in your report that we have more excess power than any other section of the state. I think about 2,000 megawatts. I don't know whether I'm right about that. But 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 multi-level 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, because we build them 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 right? yes representative that's that's correct
Speaker 30
1:31:07
uh for example it's my understanding and you have to forgive me i'm not not a seismic
Chair
Unverified
1:31:13
engineer but but the um i think there's some industries that have like factories or manufacturing or so on that's up there that have essentially like some type of rollers yes uh 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
Representative Jack Ladyman
Unverified
1:31:35
nuclear plant that we put up there? Okay, that's for liquefaction, okay? Okay. Because in Jonesboro, the distance we are from the fault, the biggest problem would be liquefaction. So the ground basically is like water waves. So if you build the structure so it rolls with that, well, then it don't. So 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 about 68 years ago. You talked about safety on site. So what about off-site safety? And I know you know the answer to this, but tell the committee, How many accidents off-site or potential off-site effects have we had in 68 years of operation of 80-some-odd plants in the U.S. and many more around the world?
Chair
Unverified
1:32:37
With the exception of Chernobyl, which I don't count since it's illegal to build that plant in the West, I believe that answer is, I'm going to say zero. But I remember from my nuclear engineering classes, one of the first exercises they had us do in the health physics class was we took the Three 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 it was the hydrogen that they released and whatever other stuff was in there,
and assume 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 was 0.8. 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 to 1,000 times safer than other industries, especially when we start taking a look at energy and fossil fuels.
Thank you. Thank you, Representative. Representative Rye, you're recognized. Yes, sir. Thank you, Mr. Chairman, for letting me in. Yes,
Representative Johnny Rye
Unverified
1:33:53
sir. Based on the other states that have been involved in this and also partnerships that have been discussed here today, Now, we see some $350 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? Okay. So here
Chair
Unverified
1:34:24
are my premises in answering that question. I'll assume that I'm going to get what's called an early site permit under Part 52, Subpart A of Title X 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 actual design.
And when you get that kind of permitting, 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 going to assume the worst aspects of all these five or six 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 to $30 million 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 of $300 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 to 100 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 probabilistic 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 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 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 the private part to bear? But I think that's what we're looking at for the licensing or the pre-permitting of each site. And that's an optimistic view, but I
Representative Johnny Rye
Unverified
1:36:54
think it's warranted. Do you have any idea how long it will take to put this in place from a turnkey job?
Chair
Unverified
1:37:00
Yes, I'm going to say 18 months, providing that you can get the met weather data in that time. There's rules on how much weather you have to have, and this is one of the places where I need the regulator to show some flexibility, like can I just take the airport's data, will 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 approval for them to begin construction. Well, 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 leave things having to do with the seismic studies and the weather and so forth. Thank you for being here. Thank you,
Mr. Chair. thank you representative right uh i appreciate that and i i was very heartened by what you said
that there was positive change at the nrc uh we look at these things on you know how long does it take to do something i mean i think they built the pentagon in like you know 16 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.
And they're starting to get more comfortable with nuclear energy. And I think the public generally is when you have the Audubon Society and the Sierra Club coming out in favor of nuclear energy simply because it's clean. I think that's a good sign, but the regulatory process has clearly been proven. We know it works. We stick with proven technologies, and I really like your term of NOAC.
We do that, but this is the problem. We can build these things, and I know you mentioned the problem of sourcing all the different components from everywhere in the world. So that's something else maybe that we need to have a national policy to address. But the regulatory process is clearly the major stumbling block to that first electron coming out of that plant.
So Representative McRuder, you're recognized.
Representative Jessie McGruder
Unverified
1:39:41
Thank you so much, Mr. Chair. Thank you all for the time, and thank you for allowing me to ask a question, being that I'm not a member of this committee. I 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 U.S. Is there any way I can get that information or in the world?
Mr. Mayor, I'll let you answer it, and then I'll supplement if
Speaker 30
1:40:17
necessary. Yes, sir. Representative Magruder, if you'll give me your card after this, I'll point you to their directories and
Chair
Unverified
1:40:23
their very reliable directories on all of that information. And I'll send you an email and I'll
Representative Jessie McGruder
Unverified
1:40:30
get all that information to you. Thank you so much. And I also want to piggyback on what Representative Ladyman was saying. Being in one of those seismic areas, is there going to be any extra cost that the taxpayers or the people of the community are having to pay
uh 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
1:40:55
the the project financing is structured there will be additional costs to the project and therefore to the extent that taxpayers
Chair
Unverified
1:41:01
are footing 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 that's entirely private or you know something along those lines But I think that the short answer to your question is yes, but it would be indirect through the project.
And I assume we look at this, it's so easy to talk about, and you make a great question there, Representative Magruder, 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 its individual citizens are paying for this whether they're taking it out of their left pocket or the right pocket you know can 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 move numbers around
we move responsibilities around but but ultimately those consumers are are paying for it Do you have a question, Senator McKee? Thank you, Mr. Chairman. I just kind of wanted
Senator Matt McKee
Unverified
1:42:09
to address that because I think the goal here for the early adopters is to have private investors build these things first to get us to the NOAC 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. The utilities are not going to build these for at least another four or five years, if not ten. So until we get to those NOAC prices, 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 get private investors into Arkansas or the federal government to start these builds so that we get to those NOAC prices, so that we don't have to deal with the cost overruns and things like this. When they're building 10, 20, 50 of these at a time around the country,
because we will have those needs, that's when 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 those NOAC prices. That's the goal, in my mind, anyway. Wouldn't you agree? Yes,
Speaker 71
1:43:16
Senator, I do agree. And while they may be paying for it, it would also end up,
Speaker 30
1:43:21
though, being lower-cost power because there would be
more power available to buy. Senator McKee, thank
you for that. and I think it's important that 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 it was a one-off thing, And there's a lot of money to be made by engineering firms and construction companies. And I like both of those outfits. I like engineering firms and construction. But you've heard the old saying that if you're a hammer, everything looks like a nail.
And if you are doing certain things, you have an economic interest in it. And I wonder over the history of this, 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
said to someone the other day, if we built, in this case, we were talking about housing.
If we built houses, if we built cars the way we built houses, nobody could afford a car. And we pretty well built nuclear power plants that people hardly afford. But considering they last a long, long time and really don't use much to operate, it plays out in the long run. But your front load cost is like buying a Rolls Royce. And so it's a matter of balancing those things. So I think we've done a good job today of airing that out,
and your study will give us something more to bite into on that, Mr. Meadows. Co-Chair Shefford, do you have anything to add on this? Okay, we'll move on then. First of all, I
guess I should ask Ms. Rogers if you had anything to add, but you've sat quietly and patiently. No, sir, I
Speaker 39
1:45:30
was here to just answer if there were any additional questions, in particular with the water availability study that we prepared. But thank
you for being here, and if we have any later, the staff will get in touch with you and get those answers.
Anything you'd like to wrap up with, Mr. Meador, before we
Speaker 69
1:45:46
move on? No, sir. Thank you very much for your time, and I appreciate the committee's
time and its interest. Thank you. I appreciate you, and you're dismissed. I'll call our
friends from the Department of Energy and Environment if they want to come forward. I don't think this will take but just a moment. I did not know the secretary was going to be here, but I'm glad he is.
And jet engines do. Yeah, that's right. Good morning. Mr. Secretary, would you identify yourself for the
Speaker 172
1:46:25
record and your colleague? Yes, Shane Corey, Secretary for the Arkansas Department of Energy and Environment. i brought as representative beck would call my legal eagle to the table
Speaker 173
1:46:36
as well so good morning amanda land chief council energy
and environment thank you mr secretary you're recognized if you
Speaker 172
1:46:42
have a short statement sure thank you um 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 think blr 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 energy environment 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 satisfy the reporting requirement we submitted the letter
It's as simple as that. Right. And committee, we have received the letter, and it's Exhibit D, I believe. Is it not right, Michelle? And everyone can look at that.
Well, without objection, we'll accept the letter as satisfying the status of the report. Thank you so much. Thank you, Mr. Secretary, Ms. Land. Any other question or business to come for the committee? If not, we stand adjourned. Easier than I expected.
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
Speaker 17
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 57
Speaker 115
Speaker 60
Speaker 109
Zach Gramli
Unverified
Speaker 128
Representative Richard McGrew
Unverified
Representative Rick Beck
Unverified
Representative Johnny Rye
Unverified
Representative Jessie McGruder
Unverified
Speaker 69
Speaker 172
Speaker 173