What PJM's Decision Means for OKLO's Ohio Project Timeline

Oklo Inc. OKLO is facing a new hurdle for its planned Ohio energy project after PJM Interconnection, the regional organization that manages the power grid across parts of the eastern United States, removed the project from its current grid-connection review process. The 750-megawatt project combines 150 MW of advanced nuclear power, 300 MW of fuel cells and 300 MW of natural gas generation. PJM cited several shortcomings in OKLO’s application, including technical questions about how the project would perform during sudden grid-voltage problems.

The bigger concern for OKLO is not that the project will be canceled, but that it could face a lengthy delay. OKLO believes the issues raised by PJM can be fixed and has challenged how the grid operator handled the review. The company estimates that losing its current place in PJM’s study process could delay the project by at least 14 months and push up development costs. This matters because power projects generally must secure approval to connect to the regional electricity grid before commencing supply. OKLO had already been working on grid studies and transmission planning for its Ohio development.

For investors following advanced nuclear names such as NuScale Power SMR and NANO Nuclear Energy NNE, the dispute also highlights an important point: developing a reactor is only part of the challenge; projects must also secure timely access to the electricity grid.

What It Could Mean for SMR and NNE

Although NuScale Power and NANO Nuclear are not involved in this dispute, OKLO’s experience shows why grid access can become an important execution issue for emerging nuclear projects.

OKLO has asked FERC, or the Federal Energy Regulatory Commission — the federal agency that oversees interstate electricity markets and transmission — to restore the project to its original place in PJM’s review process. If that happens, the impact on the development schedule could be limited. If not, OKLO may have to enter a later review cycle, creating greater uncertainty around the Ohio project’s timing and costs. The dispute therefore puts the timing of OKLO’s Ohio project at risk until the grid-connection issue is resolved.

Investors watching NuScale Power and NANO Nuclear may therefore increasingly consider grid-connection progress alongside licensing, construction and other project milestones.

The Zacks Rundown on OKLO

Shares of OKLO have lost 43.5% so far this year, underperforming the industry's essentially flat performance.

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OKLO currently has an average brokerage recommendation of 1.96 on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 23 brokerage firms.

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See how the Zacks Consensus Estimate for OKLO’s earnings has been revised over the past month.

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The stock currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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