Q3 2024 NuScale Power Corp Earnings Call
Speaker Change: Good afternoon and welcome to New Scale's third quarter 2024 earnings results conference call. Today's call is being recorded.
Speaker Change: All participants are in a listen-only mode. After the management's remarks, there will be a question-and-answer session, and to ask a question at that time is star 1 on your telephone keypad.
Speaker Change: A replay of today's conference call will be available and accessible on NuScale's website at ir.nuscalepower.com.
Speaker Change: The web replay will be available for 30 days following the earnings call. At this time for opening remarks, I would like to turn the call over to Scott Kozak, Director of Investor Relations. Please go ahead, Mr. Kozak.
Scott Kozak: Thank you, Operator. Welcome to NuScale's 3rd Quarter 2024 Earnings Results Conference Call. With us today are John Hopkins, President and Chief Executive Officer, and Ramsey Hamady, Chief Financial Officer. On today's call, NuScale will provide an update on our business and discuss financial results. We will then open the phone lines for questions.
Scott Kozak: This afternoon, we posted a set of supplemental slides on our Investor Relations website that's reflected in the safe harbor statements on slide two, the information set forth in the presentation discussed during the course of our remarks.
Scott Kozak: and the subsequent Q&A session includes four looking statements which reflect our current views of existing trends and are subject to a variety of risks and uncertainties.
Scott Kozak: You can find a discussion of our risk factors, which could potentially contribute to such differences, in our Form 10-K and subsequent SEC filings.
Speaker Change: I'll now turn the call over to John Hopkins, NewScale's President and Chief Executive Officer. John?
Thank you, Scott, and good afternoon, everyone.
Speaker Change: For nearly two decades, energy demand in the United States has remained largely flat.
However, in the past year, the growth trajectory has inflected.
with Power Demand Forecasts and to Accelerate Aggressively.
Speaker Change: While this demand outlook is supported by on-shoring trends, boosting domestic manufacturing, electrically powered transportation, and heavy industry, the most important driver is data centers.
Speaker Change: Technology companies are racing to secure massive amounts of uninterrupted energy to operate complex data centers and power increasingly sophisticated artificial intelligence.
The demand for carbon-free energy is accelerating.
Speaker Change: This urgent need is at the heart of what New Scale Technology can bring to this market.
Speaker Change: I'd like to take this time to reinforce our view that powering the technology industry is an integral part of our future.
Speaker Change: As depicted on slide 3, data centers are seeking more computing power, faster and more powerful processing, and enriched artificial intelligence.
Speaker Change: all requiring far more energy, which they need 24-7 with 5-9s. That's 99.999% reliability.
Speaker Change: According to a recent McKinsey analysis, the portion of domestic power output consumed by U.S. data centers is expected to increase from 3 to 4 percent in 2023 to 11 to 12 percent in 2030.
Speaker Change: In other words, U.S. data center power consumption will rise from 25 gigawatts in 2024 to over 80 gigawatts by 2030, requiring an investment exceeding $500 billion.
Speaker Change: What's more, hyperscalers have made commitments to customers and shareholders for meeting their accelerating power demands with carbon-free energy.
Inter-Nuclear, and in particular Small Modular Reactors or SMRs.
An energy source that is compact, clean, and constant.
Nuclear is the superior choice.
Speaker Change: Coal and natural gas power generators have obvious carbon emission challenges, and renewables like wind and solar are still intermittent.
Speaker Change: While renewables are undoubtedly important in our clean energy future, nuclear, and specifically SMRs, are uniquely positioned to take the lead in powering these massive data centers.
Speaker Change: The world's major tech companies are discovering the value of nuclear.
Speaker Change: As seen on slide 4, driven by the need for sustainability along with an AI revolution,
Speaker Change: We have seen numerous recent announcements from tech companies scouring the country for carbon-free electricity and zeroing in on nuclear energy.
Speaker Change: In March, Amazon acquired Talent Energy's data center campus connected to the Saskatchewan nuclear station.
Speaker Change: Also in September, Constellation Energy announced plans to restart an 835 megawatt reactor at the Three Mile Island nuclear plant and sell 100% of that power it generates to Microsoft.
Speaker Change: As Google pursues its goal of becoming carbon neutral by 2030, its CEO Sundar Pichai said SMRs could be used to generate more than one gigawatt of power for a planned large-scale data center.
Speaker Change: Sundar Pichai that <unk> could be used to generate more than one gigawatt of power for a planned large scale data center.
Speaker Change: Similarly, on Oracle's most recent earnings call, Chairman Larry Ellison discussed designing data centers powered by SMRs that require more than one gigawatt of energy.
Speaker Change: Similarly on oracles, most recent earnings call Chairman, Larry Ellison discuss designing data centers powered by <unk> that require more than one gigawatt of energy.
Speaker Change: This change is happening now, today. And just as tech companies are choosing nuclear power, they're also seeking small modular reactor technology.
Speaker Change: This change is happening now today and just as tech companies are choosing nuclear power Theyre also sika and small module reactor technology.
Speaker Change: a safer, cheaper, and more consistent means of delivering carbon-free electrons.
Speaker Change: For cheaper and more consistent means of delivering carbon free electrons as.
Speaker Change: As the only U.S. NRC-approved technology with reactors already in production, NuScale leads the industry in near-term deployability.
Speaker Change: As the only U S. NRC approved technology with reactors already in production new scale leads the industry in near term deploy ability.
With our commercialization partner <unk> energy, we are moving closer to supply and their inter one energy plants as they continue to finalize commercial agreements.
Speaker Change: With our commercialization partner, InterOne Energy, we are moving closer to supplying their InterOne Energy plants as they continue to finalize commercial agreements.
Speaker Change: I am in dialogue with senior executive from prospective customers almost daily.
Speaker Change: I am in dialogue with senior executives from prospective customers almost daily and I can confirm there is fundamentally more interest in understanding nuclear technologies, regulations, supply chains, and business models than ever before.
Speaker Change: And I can confirm there is fundamentally more interest in understanding nuclear technologies regulations supply chains and business models than ever before.
Speaker Change: This is not rhetoric for Dan.
Speaker Change: This is not rhetoric for them. These hyperscalers need this power now.
Speaker Change: These hyper scalar is need this power now and then.
and an ever-increasing amount over the long term.
Speaker Change: An ever increasing amount over the long term.
Speaker Change: And they are responding positively to the <unk> energy plants commercial model better structured to mitigate a significant number of <unk> related risks, including first of a kind development risk and execution construction risk.
Speaker Change: and they're responding positively to the Inter1 Energy plants commercial model that are structured to mitigate a significant number of SMR related risks including first-of-a-kind development risk and execution construction risk.
Speaker Change: Scalar has also benefit from our new scales asked of our scalability availability reliability and equally important near term deploy ability.
Speaker Change: Two additional points on this topic first.
Two additional points on this topic.
Speaker Change: First we expect to enter one energy plants with new scale as some of our technology to be competitive with the recent Microsoft constellation at Google talent agreements.
Speaker Change: First, we expect Inter1 Energy plants with new scale SMR technology to be competitive with the recent Microsoft Constellation and Google Talent Agreements.
Speaker Change: Second, there are very few restart opportunities in large-scale nuclear with fabled economics similar to Three Mile Island.
Speaker Change: Second there are very few restart opportunities in large scale nuclear with favorable economics similar to three mile Island.
Speaker Change: Hyperscaler companies will have to secure SMR new bills to meet their reliability objectives and sustainability targets.
Speaker Change: Scalar companies will have to secure <unk>, new builds to meet their reliability objectives and sustainability targets.
Speaker Change: These prospective new scale power plants are generating significant interest from infrastructure capital as well as large commercial banks.
Speaker Change: These prospective new-scale power plants are generating significant interest from infrastructure capital as well as large commercial banks.
Speaker Change: For context, in September, a group of 14 global financial institutions, including Citigroup, Barclays and Morgan Stanley, announced their support to triple nuclear energy capacity and reach net zero by 2050.
Speaker Change: While data centers are extremely important, we're seeing increased interest across the board from a variety of potential offtakers, as you can see on slide 5.
Speaker Change: NuScale was the only nuclear company to present at the recent GASTEC event in Houston.
with 50,000 people in attendance.
Speaker Change: We continued our dialogue with interested prospects, including senior executives at major oil and gas companies seeking not only power, but also high-pressure, high-temperature steam for hydrogen and ammonia production.
Speaker Change: These executives understand how attractive our site boundary emergency planning zone is.
Speaker Change: as well as our capacity to be off-grid and appreciate that new scale technology is multiple years ahead of other proposed SMR technologies.
Now let's discuss international opportunities.
Speaker Change: Our technology is widely acknowledged across the globe as important for both climate disruption and energy security.
Speaker Change: This has led to an advanced interest in East and Southeast Asia, Eastern Europe, the Middle East and Africa.
Speaker Change: In the third quarter, S&N and Row Power were authorized to proceed with Phase 2 front-end engineering design or feed work.
Shortly after a third quarter ended, Floor
Speaker Change: The prime for Phase 2 feed finalized a subagreement with New Scale Feed Phase 2, which will include tasks related to the development of Class 3 plant construction estimates, as well as support to RowPower with its regulatory and stakeholder engagements.
Speaker Change: Separately, in August, the U.S. Department of State announced that Regnum Technology signed an MOU with the government of Ghana to pursue development of an SMR plant and had chosen NuScale technology to power it.
Speaker Change: We also plan to open an Energy Exploration, or E2, Center at the Ghana Atomic Energy Commission site on the campus of the University of Ghana.
Speaker Change: This will be our sixth E2 Center globally, with other facilities operating in universities in Romania, Korea, and the United States.
Speaker Change: Interest and potential demand for the technological benefits that New Scale SMRs offer have never been higher.
Potential customers see and appreciate what sets New Scale apart.
Speaker Change: the ability to meet their strategic risk parameters in financial objectives without the need to capitalize, own, or operate their own plant.
Speaker Change: Negotiating agreements is a complex process that, by nature, takes time, but we continue to make significant headway and remain confident that we can achieve our near-term sales goals.
Speaker Change: As conveyed on slide 7, the U.S. must remain at the forefront of the green energy transition.
Speaker Change: The production of nuclear energy as a baseload power is imperative to maintaining carbon-free reliability in the U.S. electricity grid and is rightly viewed as a national security imperative.
Speaker Change: Domestic policy initiatives, including the chips and science Sac and the inflation reduction act cannot be fully realized without access to abundant carbon free power.
Speaker Change: Further given the recent election outcome and the long held priorities of the incoming administration, we expect development of nuclear energy to further accelerate <unk>.
Speaker Change: Scale and Andrew on energy are optimally positioned to support this ongoing transition.
Speaker Change: As seen on slide eight new scale is at the forefront of next generation nuclear energy producers with regards to design safety and innovation.
Speaker Change: We have systems features and capabilities are unmatched amongst other competing nuclear technologies <unk> or otherwise.
Speaker Change: For example, you scale power modules have the ability to safety shutdown and self cool indefinitely without the need for AC or DC power.
Speaker Change: Operator interaction or any additional water.
Speaker Change: This enables what is termed an unlimited coping period.
Speaker Change: First for light water reactor technology, and an extraordinary differentiator in relations to safety.
Speaker Change: Vision, the NRC approved our methodology in determining the emerging planning zone or E. Z go can you scale powered energy plants.
Speaker Change: As opposed to traditional nuclear power plants, which are required to have an EPC of 10 miles in the U S. We can achieve an APC limited to the site boundary.
Speaker Change: A smaller EPC significantly reduces plant operating costs and further enables the siting of new skills technology, where it is needed most.
Speaker Change: <unk> retired coal power plant locations and close enough to manufacturing facilities to provide high temperature high pressure steam for industrial applications.
Speaker Change: Further <unk> do not require grid power connection for safety, which is another first for our nuclear power plant.
Speaker Change: Moving onto slide nine an important reason why are we the only near term deployable <unk> as the we are the only technology with design certification from the U S nuclear regulatory commission or NRC.
Speaker Change: Others in the <unk> marketplace remain at the early stages of multiyear processes and working towards approval.
Speaker Change: Our second standard design approval application for our power up rate to 77 megawatt electric is scheduled to conclude by mid 2025.
Speaker Change: Design up rate is based on our same fundamental safety case and features approved by the NRC in 2020.
Speaker Change: We believe the 77 megawatts new scale power module supports a wider range of customers.
Speaker Change: Now, let's turn to manufacturing, where we're also leading the pack Tucson and earn ability continues making progress introducing our first new scale power modules. The only NRC approved <unk> in production.
On Slide 10, you will see the images from new sign in support of manufacturing and supply chain readiness activities.
Speaker Change: Discontinued work provides advantages to our next project deployments shortening delivery significantly.
Speaker Change: When it comes to manufacturing our modules new scales relationships that are long term supply chain partners. Many of which are also strategic investors are one of the most significant sources of our strength.
Speaker Change: <unk> and other members of our supply chain have made substantial investments retooling their facilities and preparation for supporting new scales commercialization.
Speaker Change: Our robust supply chain has positioned new scale as a clear leader in manufacturing readiness and EMR space and is why we are ready to produce customer orders right now.
Speaker Change: Before I turn the call over to Ramzi I wanted to Echo a recent comment from constellation Energy CEO Joe Domingos.
Speaker Change: The most important energy commodity in the world today is they are reliable and clean electric megawatt.
Speaker Change: New scale has the ability to produce clean reliable energy reach end users and help them achieve their sustainability goals.
Speaker Change: Whether it's an industrial electrification processes.
Speaker Change: The rapidly escalating demand of the data economy.
Speaker Change: New scales <unk> technology as part of the energy solution for the future.
Speaker Change: Recently, Idaho National Lab performed a landmark study, which validates that a new scale integrated energy system is both technically viable and economically competitive with our high temperature gas cooled reactor or gen. Four four processed steam applications.
Speaker Change: New scale has advantage and that is the only <unk> with a design certification with modules in production.
Speaker Change: We maintain competitive advantages in technology safety manufacturing readiness sighting and regulatory success.
Speaker Change: And are prepared to produce and deliver.
Speaker Change: I am looking forward to continuing to update you on our progress in the months ahead.
Ramsey Hamady: No Ramsey will provide our financial update Ramsey.
Ramsey Hamady: Thank you John and Hello, everyone.
Ramsey Hamady: Our financial results are available in our filings.
Ramsey Hamady: My focus will be on display in the major line items.
Ramsey Hamady: The slide 11 third quarter results and relevant factors impacting our financial position.
Ramsey Hamady: Just following up for Q3, 2024, unless I state otherwise.
Ramsey Hamady: <unk> overall cash position improved during the period.
Ramsey Hamady: And in the third quarter with cash cash.
Ramsey Hamady: Equivalents and short term investments of $161 7 million.
Ramsey Hamady: $5 1 million of which is restricted and no debt.
Ramsey Hamady: We're pleased with the progress we have made strengthening our balance sheet and reducing our operating expenses over the course of 2024.
Ramsey Hamady: The Companys cash position is higher now than it was at year end 2023.
Ramsey Hamady: Given primarily by the careful and measured utilization of our ATM program as well as disciplined budgeting and cost optimization efforts.
Ramsey Hamady: For the quarter ended September 32000.
Ramsey Hamady: Four <unk> reported revenue of <unk> $5 million and net loss of $45 5 million.
Ramsey Hamady: This includes a noncash expense of $7 2 million relates to an increase in the fair value of warrants outstanding.
Ramsey Hamady: During the same period in the prior year, the company reported revenue of $7 million and net loss of $58 3 million, which.
Ramsey Hamady: Which include noncash income of $11 1 million related to our warrants.
Ramsey Hamady: Operating expense was $41 2 million compared to $93 9 million in the year earlier period.
Ramsey Hamady: The year over year reduction in operating expense of $52 7 million reflects the company's actions to reduce costs and operate more efficiently.
Ramsey Hamady: Separately during the third quarter, we reported an operating loss of $41 million.
Ramsey Hamady: This compares to an operating loss of $92 9 million in the third quarter of 2023.
Ramsey Hamady: Looking forward <unk> will maintain our financial discipline and remain focused on managing liquidity and risk.
Ramsey Hamady: We're committed to sustaining a prudent liquidity reserve.
Ramsey Hamady: I will conclude my remarks with a preview of our capitalization summary on slide 12.
Ramsey Hamady: Additional information may be found in our SEC Form 10-Q and earnings release.
Ramsey Hamady: With that I'd like to thank you again for joining today.
Speaker Change: Alright and scale.
Speaker Change: Take questions operator.
Speaker Change: Thank you as a reminder, if you have a question. It is star one on your telephone keypad to withdraw your question simply press Star One again one moment. Please for your first question.
Speaker Change: Your first question comes from the line of Eric Stine with Craig Hallum. Your line is open.
Speaker Change: Hi, everyone. Thanks for taking the questions Tonight.
Speaker Change: Sure.
Speaker Change: Hey, so.
Speaker Change: I know I mean, this I know it has to happen.
Speaker Change: It happened recently, but just curious your thoughts on the FERC <unk> injection of talent in the Amazon data Center.
Speaker Change: Obviously, it would seem to me that it proves out.
Speaker Change: The need for <unk> incremental power Baseload zero emissions et cetera.
Speaker Change: Curious I mean again I know, it's early right and it just happened but is that something that you expect to drive further interest.
Speaker Change: From your pipeline and new customers.
Speaker Change: Yes, I think that.
Speaker Change: And it was quick and it was I don't think it's over with.
Speaker Change: <unk> wants to have electrons, so I'm gonna get grid versus behind the meter. So it's still to pan out I think it's too early in the process related comment other than the fact.
Speaker Change: Don't believe personally that its going to be a holdup going forward in the market.
Speaker Change: Got it is it.
Speaker Change: I mean, because that <unk> would be incremental power.
Speaker Change: To me that was the biggest thing right that part of the reason. This was rejected at least for now is because it wouldn't be taking electrons from.
Speaker Change: Someone else.
Speaker Change: Rather than incremental power at the site of use.
Speaker Change: Okay, Yes, that's what I read, but I really don't know beyond what you read okay rationale behind it so I am sure.
Speaker Change: We will soon things will occur within near term, we'll have a better understanding.
Speaker Change: Okay fair enough.
Speaker Change: I guess second one for me just good to hear on the upfront.
Speaker Change: Progress on the expectation that it's on track for mid 25, I mean, maybe just remind me what the importance of that four part 52 approval win win whether it's in for one.
Speaker Change: Or someone else goes through that process.
Speaker Change: And just curious also I know you've got a big pipeline are there customers, who are kind of waiting on that operate approval before moving forward.
Speaker Change: Yes.
With the NRC were we're in regular communications with them as you can imagine frequently Alex I have what's called a drop ins we visit with commissioners in this particular case I also met with the Chairman Hansen and.
Speaker Change: To your point, we are on schedule.
Speaker Change: Hoping to get to the technical aspects here soon and but we're still on schedule to meet the.
Speaker Change: NRC schedule of mid 25, which we are looking about the July timeframe, if not sooner the importance of it is that as we went through the NRC process. So as you recall, we submitted our designers.
Speaker Change: <unk> application for 12 modules at 50 megawatts electric and having gone through the process through the NRC licensing of scaling up and modeling became is the realization that same machine.
Speaker Change: Essentially we were conservative could push outwards towards 80 megawatts of electric and we felt the economics better supported 80 and also our customers.
Speaker Change: Asking about an additional.
Up to the 80 megawatts per unit.
Speaker Change: Look what's happening today in the data centers.
Speaker Change: We were originally thinking on coal plant refurbishment and a lot of companies who are asking for six modules. Today. It's 12 modules and added 12 module plan of 77 megawatts of electric portion pretty much a gigawatt size plant scalable. So this is very attractive to the customers. We're in discussions with today.
Speaker Change: Okay.
Speaker Change: Eric This is Randy just to add on.
Speaker Change: Yes.
Speaker Change: Jay you mentioned as we work.
Speaker Change: What's a large data center and tech companies, we're working with everyone in energy as they progress in their discussions with the large tech companies.
Speaker Change: And.
Speaker Change: I haven't seen it yet.
Speaker Change: I haven't heard feedback from them that anyone has.
Speaker Change: Wade or field day sort of.
Speaker Change: Yes.
Speaker Change: Progress discussions based on the upright and we're so far through the process and it's a two year process. We're looking down now around the last six or seven months.
Speaker Change: And you have to remember out out there in the market today.
Speaker Change: People are signing Ppas are making announcements with technologies that are nowhere near the stage of that alright.
Speaker Change: Yes.
Speaker Change: The progress that those companies have made and we're always while it's helpful and supportive of our peers, but.
Speaker Change: But our technologies.
Speaker Change: As much further advanced and we.
Speaker Change: We're seeing people tap into ppas with.
Speaker Change: With really just a very.
Speaker Change: Very theoretical designs at this point.
Speaker Change: Yes.
Speaker Change: Okay. Thanks, a lot.
Speaker Change: Yes.
Speaker Change: The next question comes from Marc Bianchi with TD Cowen Your line is open.
Speaker Change: Hey, thanks.
Speaker Change: I guess Ramsey you just mentioned those other announcements I was curious was new scale.
Speaker Change: Involved in some of those discussions and where there were there any aspects of.
Speaker Change: The way those arrangements are put together that are maybe I don't know not not part of how you guys would want to have your business model put together I'm just kind of curious of your reaction to.
Speaker Change: To the details of those announcements.
Speaker Change: Margaret I think those announcements are pretty varied.
Speaker Change: From Amazon.
Speaker Change: Amazon, making investments and tax synergy.
Speaker Change: So Google signing.
Speaker Change: Yes, I think something resembling a PPA with with <unk> power.
Speaker Change: There's a pretty wide breadth of what's out there in the market.
Speaker Change: Hey, guys.
Speaker Change: They're just now.
Speaker Change: Yes, Eric what we're doing is we're working with them for one let's say progress those discussions.
Speaker Change: I haven't been bidding.
Speaker Change: I don't have.
Speaker Change: I don't have a relative comparison points between discussions that one is progressing.
Speaker Change: <unk> and these other groups.
Speaker Change: Yes, I do think that there are no untoward model.
By a different sort of comparisons.
Speaker Change: So are you on the line.
Ramsey Hamady: Yeah Ramsey I'm here so.
Speaker Change: Enter one discussions with.
Speaker Change: The tech companies are different and flavor.
Speaker Change: So I all I can say is that there is still continuing and progressing and.
Speaker Change: We're obviously.
Speaker Change: And different in a different place as far as our technology and where we are so.
Speaker Change: We're having.
Speaker Change: I would say a.
Speaker Change: Concrete discussions, but different than what's been announced.
Speaker Change: Mark as you John but let me, let me add to that.
Speaker Change: And again it bears out what we've been saying now for a few years, having these out.
Speaker Change: Alpha is I'd call them are tier ones.
Speaker Change: Looking at nuclear in the way that they are.
Speaker Change: It's great for our industry and.
Speaker Change: The the announcements they made that as an option there are a lot of it gets into.
Speaker Change: What we're hearing is they need near term deploy ability, but they're also looking to future state. So.
Speaker Change: Me those announcements.
Speaker Change: Just validates the fact that these large scale companies are in fact looking at nuclear.
Speaker Change: A solution to what they are looking for a future state.
Speaker Change: And also near term so we're in discussions with the same companies.
Speaker Change: Hum.
Speaker Change: Okay great.
Speaker Change: The other thing that I noticed switches.
Speaker Change: There was a $2 million customer deposit announced in the quarter here when I look at the cash flow statement was that is that related to ROE power or is there another customer involved there.
Speaker Change: Yeah.
Speaker Change: Mark.
That is in relation to Repower and just our progress on the on the on the project with them.
Speaker Change: Yes.
Speaker Change: As I as I look at as I look at that yes. There is no corresponding revenue. So revenue recognition is a different item.
Speaker Change: Our cash flow statement, there was a $20 million deposit.
Speaker Change: I think it points to is the fact that yes, we are.
Speaker Change: Aggressive and pre engineering services and technology licensing we're progressing towards.
Speaker Change: Yes towards the appointment of Biosimilar Smart modules, which is which is really which is really the price for us.
Yes, indeed it is.
Speaker Change: The other other one I had was just on the feed study with throw power. So we got that document and it looks like kind of the timeline there what have you.
Speaker Change: With a class a class III estimate in June of 'twenty five.
Speaker Change: Worked it out properly is that it.
Speaker Change: Should we be expecting any kind of an update around that time will we see when we get any kind of indication of how the cost is looking for the project is that is that a milestone where you know that.
Speaker Change: Think back to the experience with UMC of the costs were changing and that ended up being something that got a lot of attention is there going to be some kind of an update related to that with this project or is it an entirely different process.
Speaker Change: Alright.
Mark: Brian This is mark.
Mark: I'm sorry.
Mark: Good process that was on the phone today with the <unk>.
Mark: <unk> <unk> and our.
Mark: CFPB as you recall, the those customers had the opportunity to opt in and opt out from a subscription that's not in play here.
Mark: We will keep you in involved we right now as I said, we are the subcontractor to Fluor Corporation, who is the prime.
Mark: The feed process is about a 12 to 14 months duration at which time.
Florida announced we're looking at.
Mark: Developing the estimates to a class III.
Mark: And also helping ROE power on the regulatory front.
Mark: Then the final investment decision will be made about a year's timeframe from today.
Mark: But yes, we will keep you appraised as we move forward.
Mark: Okay.
Speaker Change: Alright, Thanks, guys I'll turn it back.
Speaker Change: Thanks Mark.
Speaker Change: The next question comes from Lyanne Hayden with Canaccord Genuity. Your line is open.
Speaker Change: Good evening, everyone and thanks, so much for taking my question just the first one for me from me given higher enrichment fuel momentum you know government incentives and the recent hyperscale or commitments in a fuel that they intend to use.
Speaker Change: Im wondering about you are.
Speaker Change: Modular fuel flexibility.
Speaker Change: I E could you use LTE plus our halo fuel to drive higher.
Speaker Change: Power output per module.
Speaker Change: Great question I'll have Clayton, who came out of our 40 years of Framatome Clayton.
Yes so.
Speaker Change: We could we could use a higher.
Speaker Change: Blend.
Speaker Change: To extend however.
Speaker Change: Where we're sitting today in our enrichment.
Speaker Change: We're comfortable to deliver 21 to 24 months cycle cycle.
Speaker Change: At this point in time.
Speaker Change: Necessarily see.
Speaker Change: Sure we would want to go any higher based on the current design that we have certified.
So we don't expect for this particular <unk> designed to go into.
Speaker Change: The higher enrichment that you typically see in the Gen. Four is.
Speaker Change: With the higher levels of Haynesville.
Speaker Change: Understood just following up on that do you think if you were to increase the uranium 235 enrichment and you'll see all of that.
Would have any impact in your passive safety mechanism and smaller EPC.
Speaker Change:
Speaker Change: Somewhat but I think the limits that we've that we've certified and projected.
Speaker Change: We're maintaining that EPC.
Speaker Change: We're trying to we don't want to exceed those boundaries.
Speaker Change: And again, it doesn't really make sense for our design based on current PW R and fuel fuel supply that we're using.
Speaker Change: Really go there.
Speaker Change: Just at this point in time.
Speaker Change: It's the way our the way we are certified the way were established.
Speaker Change: Established.
Speaker Change: It fits our parameters so.
Speaker Change: Could you could you do it technically yes, but.
Speaker Change: It has impacts on the overall design that we don't think are are beneficial for first for our particular plant. The way we have it certified today and where we anticipate youre seeing it in the market.
Speaker Change: I think the other answer is we that fuel fuel is readily available I mean framer tone is manufacturing a few and in Richmond, and we don't see unlike high assay. Our Halo few that still has to be manufactured as it goes with licensing process fuel is not an issue for us because of 404.
Speaker Change: The reactors around the world, where advanced or light water reactors are using similar fuel.
Speaker Change: Understood got it. Thank you. Thank you both so myself John Thank you.
Speaker Change: You bet.
Speaker Change: The next question comes from Max Hopkins with CLSA. Your line is open.
Max Hopkins: Hello, guys can you hear me.
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: Question I don't know if you can provide clarity, but on the department of energy.
Speaker Change: 800 million.
Speaker Change: Dollar light water reactor program.
Speaker Change: Is that obviously there is the developers the EPC is the power plant.
Speaker Change: To bring that forward do you guys need to sign a deal and then bid or can you attracted deal and then with the department of energy put together the team how does that looking.
Speaker Change: No you have to put together its a cost share program.
Speaker Change: So whomever partners utility or an industrial.
Speaker Change: Would in fact put that team together and it would be a competitive process.
Speaker Change: Clayton Youre adjacent add anything to add.
Speaker Change: No I mean it.
Speaker Change: To your point, it's putting a team together and submitting an application to which we will review all the different applicants and decide based on a lot of different parameters how they.
Speaker Change: Monitor perceive whether thats a single a single funded project or dual funded project, but.
Speaker Change: Yes.
Speaker Change: It's a combination of.
Speaker Change: Application.
Combinations of.
Speaker Change: Different partners and different.
Speaker Change: Projects that they will evaluate overall.
Speaker Change: Okay. Thank you and then one more if you don't mind.
Speaker Change: Obviously, there is other data centers talking about meeting the power now.
Speaker Change: And <unk> are years away.
Speaker Change: At this point doesn't lend itself to to natural gas development right now is that fair to say.
Speaker Change: It could.
Speaker Change: I don't see natural gas going anywhere and but if you look at the commitments that these tier one ai's have made and de Carbonization, you know looking at 2030 or 2040.
Speaker Change: It's tough to deal with when you're dealing with natural gas, but natural gas is an option.
Speaker Change: Okay.
Speaker Change: Yeah.
Speaker Change: Thank you.
Speaker Change: Okay.
Speaker Change: The next question comes from Ryan <unk> with B Riley Securities. Your line is open.
Speaker Change: Hey, guys. Thanks for taking my questions.
Speaker Change: You bet the first.
The first of all let's say up rate approval expected in the middle of next year can you just remind us is that specifically for the six module design and if it is.
Speaker Change: What's your expectation for getting approval for the 12 module design in terms of.
Speaker Change: And our C related costs or timelines there given you already have the work done with six.
Speaker Change: Great.
Speaker Change: So there's there's elements that are related to six but there's also elements within the up rate that applied to 12.
Speaker Change: And basically when we do our first 12 module site.
Speaker Change: Independent of the up rate because the upgrade is more specific around the module.
Speaker Change: We will do a site specific license based on a 12 module site.
Speaker Change: Ever site parameters, we have seen evaluate.
Speaker Change: Got it.
Speaker Change: And then Jonathan.
Speaker Change: John in the prepared remarks, you talked about it a little bit with the change of administration in Nucleators garnered really strong bipartisan support but.
Speaker Change: Do you see kind of stronger support.
Speaker Change: From.
Speaker Change: A Trump administration and.
Speaker Change: New programs given the Republican sweep that you might not have seen.
Speaker Change: From the last administration.
Speaker Change: It's really too early to say.
Speaker Change: I think if if vice President Harris administration already got and we are seeing probably more regulations I think with president Trump will see trying to curtail and have less regulations.
Speaker Change: Do happen to know that having they had conversation with them previously and as last year. He was very pro nuclear.
Speaker Change: And.
Speaker Change: I'll leave it at that.
Speaker Change: Think about what we constantly hear it's about competition with state owned enterprises in the international market.
Speaker Change: And for that to happen, we get we have to have American technologies deployed and operational.
Speaker Change: So we're very hopeful we will see through this current president puts around him, which I think is absolutely.
Speaker Change: Key and we're very.
Speaker Change: I am hopeful that the answer is going to be absolutely.
Speaker Change: We will see an acceleration in advanced nuclear.
Speaker Change: Yeah.
Speaker Change: Thanks for taking my questions.
Speaker Change: You bet.
Speaker Change: This concludes the question and answer session I'll turn the call to CEO, John Hopkins for closing remarks.
John Hopkins: Yes, thank you operator.
John Hopkins: As we've been talking nuclear technology is poised to play a critical role in powering a global clean energy transition.
John Hopkins: <unk> already discussed numerous examples of technology companies with data centers to support moving decisively to secure reliable carbon free nuclear energy and in this environment. We do truly believe new scale is well positioned to commercialize our technology. Our <unk> as we said has been certified by the U S Nuclear regulatory Commission.
John Hopkins: Yes, we maintain industry, leading manufacturing readiness and along with our global partner enter one we're executing on a robust project development pipeline and we're very pleased with our progress and look forward to reaching our goals.
John Hopkins: And with that I'd like to thank everybody on the call who has the interest in new scale and participating today. Thank you.
Speaker Change: This concludes today's conference call. Thank you for joining you may now disconnect.
Speaker Change: [music].
Speaker Change: Yes.
Speaker Change: [music].