By Morgan Chilson
TOPEKA — The company behind a pilot nuclear project near Parsons is under fire after a report said it is underestimating costs, overestimating the project’s energy efficiency and promoting an unrealistic timeline.
The report by Iceberg Research, which assesses publicly available financial information to look for irregularities, called Deep Fission a “money pit.”
Deep Fission said in a news release that the report is “highly misleading” and contains “numerous distortions, inaccuracies and mischaracterizations.”
The stock market took note, however, and the California-based company’s stock, listed on NASDAQ as FISN, has dropped more than 50% since the report came out Sept. 24.
The report deepened concerns of members of Prairie Dog Alliance, an activist organization demanding more information about the nuclear project and raising concerns that it is untested technology.
“Given how speculative and novel their approach is, we are alarmed by the state of Kansas and their acceptance of Deep Fission’s activities,” said spokesperson Marjorie Reynolds. “The local county commission should be demanding a more open, inclusive public participation process.”
Reynolds said her organization wants Kansas governmental entities to develop a set of rules that specifically addresses Deep Fission activities. In addition, they are calling on Deep Fission to “halt its Gravity micro-reactor siting pending resolution of all allegations.”
Central to the report was Iceberg’s analysis that Deep Fission misrepresented the cost of energy that would be produced by its reactor. Before the company made its initial public offering in June, Deep Fission said its levelized cost of energy, or LCOE, would be $50 to $70 per MWh, Iceberg reported.
After that, Deep Fission dropped the reference, according to the report. Using figures in the prospectus, Iceberg calculated the cost of energy would be between $148 to $289 per MWh.
Such a cost to provide energy wouldn’t be competitive with other energy options, Iceberg said, pointing out that most data centers being built are choosing to use natural gas for power.
Reynolds said in an email to Kansas Reflector that the report and subsequent stock price fall, as well as possible legal actions, raise concerns the company won’t be able to complete the project.
“As a direct result of the Iceberg Research report, there are now five different law firms conducting investigations on behalf of alarmed Deep Fission stockholders alleging that Deep Fission employees have possibly engaged in securities violations,” she said. “Will this lead to a further investigation by the Securities and Exchange Commission?”
Iceberg’s report also questioned the proposed timeline for the Deep Fission reactor to be online.
“FISN claims it can secure Nuclear Regulatory Commission (NRC) approval in less than a year,” the report said. “Yet it has already struggled with the less demanding Department of Energy (DOE) process, missing the program deadline while at least four peers have already completed it.”
The report criticized Deep Fission’s statements that it has a large customer pipeline, pointing to the undeveloped industrial park in Parsons as having “doubtful demand” for a nuclear reactor.
In its response to the report, Deep Fission said it stands behind information it has publicly disclosed.
“The Company has been consistently transparent with its shareholders, its regulators and the public about what its technology can do, the progress it has made and the work that remains, including the risks and uncertainties inherent in developing and commercializing nuclear energy,” the company statement said.
The company said it is reviewing the report and evaluating options, including potential legal remedies.
Iceberg Research said in a disclaimer statement that readers should assume it has a short position in the securities and “therefore stands to realize gains in the event that the price of the covered securities declines.”
Also in the disclaimer, Iceberg said its reports are opinions, “which we have based upon generally available public information, field research, inferences and deductions through our due diligence and analytical process.”
