SHINE lobbies for more federal funding

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Neil Johnson
Saturday, June 17, 2017

As SHINE Medical Technologies continues to stump for money to build a medical radioisotope plant in Janesville, public documents reveal SHINE has begun to press the federal government for more grant funding.

Federal lobbying disclosure filings show SHINE has hired three lobbying firms, and one of those firms in 2016 and 2017 lobbied Congress, the White House and the U.S. Department of Energy to lift its $25 million cap on the National Nuclear Security Administration program that fuels medical radioisotope projects such as SHINE’s Janesville project.

The request is part of a push by SHINE to gather funding it needs to build a commercial radioisotope production plant on Janesville’s south side. It comes at a time when SHINE has inked a deal with the city of Janesville to add $1.5 million to SHINE’s $9 million tax incentive package.

In all, SHINE has spent more than $300,000 on federal lobbying efforts since 2014—and since 2016, the rate of SHINE’s lobbying spending has ramped up and shifted focus, according to federal documents.

Since 2016, SHINE has spent $250,000 on lobbying, including $60,000 to lobby federal officials to lift the cap on the grant program that would fuel SHINE’s project, according to lobbying disclosure forms filed at the Senate Office of Public Records.

Other lobbying money SHINE has spent in the last few years, according to lobbying reports, are pushing for a full implementation of the American Medical Isotopes Production Act, or AMIPA. That law is designed to aid domestic medical radioisotope projects and speed the projects to market while leveling the playing field between domestic producers and government-subsidized radioisotope producers in other nations.

SHINE CEO Greg Piefer told The Gazette in a June 7 interview that SHINE believes a full implementation of the American Medical Isotopes Production Act would allow SHINE access to federal funding of “up to half” its Janesville project cost.

The full cost of SHINE’s Janesville project is not clear. Recently, SHINE has repeatedly declined to publicly disclose up-to-date cost estimates. Earlier estimates were that the project could cost upward of $200 million with at least $100 million of that tied to building its Janesville production facility.

Gale Price, city economic development director, this week said construction of SHINE’s Janesville project could cost about $180 million. SHINE on Friday said construction would cost “significantly” less than that estimate but did not provide a specific figure.

National Nuclear Security Administration has already agreed to give SHINE a $25 million grant, some of which already has been awarded. SHINE is lobbying for more.

According to documents obtained by The Gazette, SHINE and its partners in January 2015 had proposed the U.S. Department of Energy increase the funding cap on its medical radioisotope project grant from $25 million to $100 million.

SHINE’s reasoning at the time: $100 million would be more reflective of a 50/50 cost share between the federal government and SHINE, according to the documents.

For SHINE, access to more government money could help convince venture capital investors to take on the risk of funding SHINE’s project.

SHINE has yet to formally field test its particle accelerator equipment. The company plans to build a prototype facility in Janesville, starting as early as this year, city and company officials said. The prototype would act as an investor marketing tool, and it would be a precursor to SHINE building its full-scale facility.

The company hopes to build its full-scale production facility starting next year on city-owned land on the south side. It hopes to have the facility shipping medical molybdenum-99 to medical customers by mid-2020, SHINE says.

That’s several months behind SHINE’s earlier target for commercialization, company officials said.

SHINE has until 2022 to finish the full project under its current project permits with the U.S. Nuclear Regulatory Commission.

The Gazette asked SHINE for comment on its lobbying and to confirm the amount of federal funding it is now seeking for its Janesville project.

SHINE responded by email Friday but declined to provide financial details or its full project cost, calling the information “proprietary.”

During a public outreach session SHINE held June 7, Piefer touched on SHINE’s lobbying while answering a resident’s question. He was clearing up the resident’s misunderstanding that SHINE had secured $50 million in grant funding.

Piefer explained the federal government is committing to $25 million, and SHINE has to match with $25 million for a total of $50 million.

After Piefer gave that explanation, Piefer told the resident “I’d love if they (the federal government) would go to $50 (million). I’ve been trying to get them to.”

In an email Friday, SHINE Vice President Katrina Pitas wrote:

“The SHINE project helps the U.S. government meet its goals to secure access to affordable healthcare and reduce the risk of nuclear proliferation associated with current methods of medical isotope production.

“As such, we discuss opportunities to accelerate the project with DOE/NNSA (Department of Energy/National Nuclear Security Administration) and other members of government, including advocating for full implementation of the American Medical Isotopes Production Act (AMIPA). AMIPA calls for cost matching up to a full 50 percent of project costs for each cooperative agreement.”

Steven Wyatt, acting press secretary for the National Nuclear Security Administration, wrote in an email Friday that federal law under its current structure “does not require the Department of Energy to fund up to half of total project costs” for medical radioisotope projects.

Wyatt wrote that the funding is intended to aid domestic medical radioisotope projects but is intended to stop short of inadvertently manipulating the world market on Mo-99.

“The $25 million (medical radioisotope grant) cap was set to allow the DOE (Department of Energy) to provide meaningful support for each of its commercial partners while ensuring that the U.S. government is not subsidizing domestic production potentially causing an adverse impact on the global Mo-99 market,” Wyatt wrote.

Wyatt declined to comment on specific lobbying by medical radioisotope interests, including SHINE, but said the Department of Energy is aware of efforts by lobbyists to get the medical radioisotope grant cap lifted.

He wrote that some medical radioisotope interests object to the removal of the funding cap because they say it could create an unfair playing field.

“Some in the medical radioisotope community have advocated for an increase in the cap, while other ... cooperative agreement partners and companies pursuing domestic Mo-99 production without any ... cooperative agreement funding object to any increase in the cap due to concern that this provides specific companies an unfair advantage,” Wyatt wrote.

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