Nuclear believers see past SEC challenge

Howard Butcher 4th, professional investor and son of an old Philadelphia business family (he was part of the last generation to run Butcher & Singer when that was an independent Center City brokerage and investment bank, not the current steakhouse), has joined the board of Boise, Idaho-based Alternate Energy Holdings Inc., which is trying to finance a nuclear power plant using technology first developed by Westinghouse in Pittsburgh.

At first sight, AEHI looks pretty inauspicious. The stock trades at 6 cents a share. Boss Donald Gillispie, a onetime Westinghouse nuclear executive, faces a Securities and Exchange Commisison civil complaint (more recently here) that he and a girlfriend who worked at the company paid themselves money they failed to report to shareholders. The company is fighting the complaint.

To the company's supporters, as played out in local-newspaper accounts and Internet chat rooms, it's not a penny stock under a shadow; it's an underdog champion of capitalism, offering the promise of cheap power.

"I've been an admirer of Don Gilispie and this project from the first," Butcher told me as we met with Gillispie on a visit to Philadelphia last month, before he joined the board. 

Besides Butcher, Gillispie's directors include nuclear consultant and retired rear admiral Michael T. Coyle, who AEHI says served from 2006-09 as Vice President of Special Projects for Exelon Nuclear; and Idaho businessman James Ryana Holt, among others. A past director is John Franz, former manager of the Limerick and Peach Bottom nuclear plants for Peco Energy.

Gillispie has ambitious plans. He's won local approval to develop a nuclear power plant in Payette County that he says would be "the biggest potential economic project in the history of Idaho," though he still needs U.S. Government approval, and billions of dollars. He hopes to use Korean-built pressurized-water reactors he says use technology first developed at Westinghouse (they competed with General Electric's boiling-water design) and later sold to Asian manufacturers: "If Westinghouse hadn't sold those rights, they'd have the world by its tail."

Gillispie's also peddling nuclear electric-power/water-desalinization systems for use in poor countries. Like the Idaho nuclear units, these are expensive projects: "I'm going to need foreign investors." He says he's confident he can find those, based on preliminary meetings in Asia. But the SEC complaint makes it harder to close than it would be otherwise. Gillispie says he's thinking about taking the company private,  in light of Sarbanes-Oxley compliance expenses - "that stupid paper game that costs $2 million a year for a company my size" - along with the SEC's "unfair action against us." The case is scheduled for a hearing this fall.