From the Henderson Home News Oct 17, 2007

Solar proposal to Boulder City not adding up

Boulder City has the third largest solar energy plant in the world, expected to produce 64 megawatts enough to power 40,000 homes.

The Solar Thermal Electric Generating Plant is in the Eldorado Valley in the far southwest corner of the vast land holdings of Boulder City.

With the successful startup of Nevada Solar One and the enormous amount of sunlight available in Nevada, the potential of profiting from the sun is stirring up plenty of excitement in the area of renewable energy companies.

One such company is International Automated Systems Inc., a Utah-based company in negotiations with Boulder City to lease about 6 acres of land near the city's waste water treatment plant in order to build a 1 megawatt test plant to prove its solar technology.

The company has captivated the interest of Boulder City Electrical Department manager Ned Shamo.

He told me he went to Mesquite three years ago to see a working prototype of the solar and bladeless turbine system presented by International Automated Systems. Shamo added there is nothing ground breaking about the technology, but it could have potential because of the water savings the system could provide compared with "conventional solar trough systems using steam turbines.

The deal sounds harmless in concept: The city leases out the land at fair market value. International Automated Systems builds its test plant, the city buys power at a discount rate, and the city has option to purchase the plant at the end of six-year lease.

Here lies the problem for me: The company has a questionable history of legal wranglings and Securities and Exchange Commission investigations.

The company has no real successes to brag about and has never made money. According to FORM 10-QSB filed March 31 with the Securities and Exchange Commission, the company appears to be declining since its inception in September 1986. The notice says:

"The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

"The Company has had no revenue and no operating income for the nine-month period ended March 31, 2007, and a net loss of $6,367,873 was incurred for the nine-month period ended March 31, 2007. As of March 31, 2007, the Company's losses accumulated from inception totaled $18,756,050.

These factors, among others, indicate that the Company may be unable to continue as a going concern for a reasonable period of time. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amount and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

"The Company's ability to continue as a going concern is dependent upon its ability to generate sufficient cash flow to meet its obligations on a timely basis, to obtain additional financing as may be required, and ultimately to attain successful operations. Management is in the process of negotiating various sales agreements and is hopeful these sales will generate sufficient cash flow for the Company to continue as a going concern."

According to this statement, management is working on a few deals. This statement may be alluding to a claimed contract with Solar Renewable Energy-1 LLC in a story at the Web site WallStreetNewscast.com on Feb. 10, 2006. The story reads, "International Automated Systems Inc. (OTCBB: lAUS - News) has signed a $150 million purchase and installation contract to install a turnkey 100-megawatt power plant for Solar Renewable Energy-1 LLC of Nevada."

A search of the Solar Renewable Energy-I LLC in the Secretary of State's office shows the limited liability company was formed on Nov. 28, 2005, only three months before the WallStreetNewsCast.com story was released.

What perplexes me is Solar Renewable Energy-1 is mentioned in press release after press release, with its CEO Charlie Vaughn, an engineer and former president of Nevada Power.

An example from RedOrbit.com reads, "After viewing LAUS' proprietary technology, Charlie Vaughn, PE, former president of Nevada Power's coal subsidiary and former vice president of power generation for Nevada Power, stated, 'The turbine with the rocket nozzle is so simple; it can be operated almost at will.

"I'm surprised someone didn't think of it before now. But, the item that places this solar technology in the same play park with fossil-fuel technologies today is the new solar panel. This is a real breakthrough in cost for renewable energy.'"

That sounds pretty credible, but it doesn't pass the smell test with me.

For example, why would International Automated Systems need to build a six-acre experimental proving plant in Boulder City? Supposedly the company is prepared to build a 550-acre, 100-megawatt plant for Solar Renewable Energy-1 LLC.

There is a lot not adding up in this deal, and it leads me to believe we could do better with wind generation with all the hot air being blown.

Boulder City officials beware: If it looks like apple but smells like plastic, well it's probably not a real pineapple.

Tim O'Callaghan, co-publisher of the News, can be reached at 990-2656 or tim.oc@vegas.com.