Oct. 19 (Bloomberg) -- Toshiba Corp., Japan's biggest maker of nuclear power plants, will start talks this month with a U.S. regulator to approve a micro reactor targeted at remote areas such as Galena on Alaska's Yukon River.

The company will hold the first meeting on Oct. 23 to brief the U.S. Nuclear Regulatory Commission on safety and other features of the new 4S reactor, seeking design certification, the U.S. regulator said on its Web site. The license is required to sell and build the plant in the U.S.

The reactor, with a fraction the capacity of typical U.S. units, is aimed at rural areas and remote islands that mostly rely on oil-fired power because of their distance from national grids. Toshiba's 4S would be sited near communities now facing record-high costs for power generated from oil. Galena, with 700 residents, is considering the new reactor, an official said.

``We are very pleased that Toshiba is now working on a schedule with the Nuclear Regulatory Commission,'' Marvin Yoder, Galena's consultant on the nuclear project and ex-mayor, said in an e-mail. ``The Toshiba plant holds promise for rural areas of Alaska and other remote areas around the world.''

The process between Toshiba and the Nuclear Regulatory Commission ``is expected to last many months'' because the reactor is ``very different from the designs the NRC currently regulates,'' commissioner Peter Lyons said in an e-mailed reply to questions.

`Scope, Schedule'

At the Oct. 23 meeting, NRC ``will discuss the scope and schedule'' for reviewing features and necessary regulatory infrastructure and the development required, he said.

The world's existing 441 nuclear power plants are mostly in developed countries such as the U.S., the biggest market with 104 units in operation. Developing countries such as China and India are expanding their capacity. Surging crude oil and coal costs have prompted countries such as Vietnam, the Philippines and Indonesia to consider the atomic energy as an alternative.

Crude oil prices have gained eightfold in the past decade and touched a record $89 on Oct. 17. Coal for immediate delivery at Australia's Newcastle, the world's largest export-harbor for the fuel, rose to a record $76.16 a metric ton in the week ended Oct. 12, according to the globalCOAL NEWC Index.

``With fuel costs rising, the cost of electricity in Galena and power prices are four times more than the national average,'' Yoder said. Galena operates six diesel generators as the main source of electricity for households. ``Galena definitely needs an alternative.''

Isolated

The town is isolated, accessible only by air or boat. It receives about 700,000 gallons of diesel a year by barge, during the summer, when the river is free of ice.

Yoder initiated talks with Toshiba in 2003, when he was the mayor of Galena, to acquire the 4S, also known as a ``nuclear battery'' due to a feature that enables the reactor to run without refueling for 30 years.

The unit produces between 10 megawatts and 50 megawatts, according to Toshiba's Web site. The most recent reactor model designed by Westinghouse Electric Co., a subsidiary of Toshiba, is the AP 1000, with capacity of 1,100 megawatts.

More than half of the 104 operating nuclear reactors in the U.S. have capacity of more than 1,000 megawatts, supplying power through grids to highly populated cities or industrial areas. The U.S.'s smallest operating reactor is in Nebraska, with capacity of 478 megawatts.

To contact the reporters on this story: Megumi Yamanaka in Tokyo at myamanaka@bloomberg.net.

Last Updated: October 18, 2007 19:17 EDT