Bellefonte nuclear deal implodes: Private developer sues after TVA cancels sale
- Nuclear Development filed a lawsuit Friday against Tennessee Valley Authority, alleging the utility misinterpreted the Atomic Energy Act's license transfer requirements when it canceled the sale of the Bellefonte nuclear power plant.
- Nuclear Development bought the Bellefonte nuclear project in November 2016 for $111 million. But TVA said the company failed to get the necessary permissions from federal regulators in order to close the sale, leading the utility to cancel the deal.
- Development began on the Bellefonte plant in the 1970s but it was eventually mothballed, leading TVA to sell the plant two years ago. Nuclear Development wants to complete the facility and supply electricity to Memphis Light, Gas and Water.
The United States could still see a nuclear power renaissance, but it is increasingly unlikely that it will be based around large-scale reactors. With expansion of South Carolina's V.C. Summer plant shut down and now Bellefonte's future cast back into doubt, the Vogtle nuclear project in Georgia remains the only project under construction today.
Nuclear Development's purchase of Bellefonte was hailed as a revival for the plant, but the deal was negotiated with a two-year delay — according to TVA officials — so that the developer could obtain from the Nuclear Regulatory Commission (NRC) the permits necessary to own the facility and take over its construction.
According to Memphis Business Journal, the NRC is reviewing Nuclear Development's application to transfer construction permits, but a spokesman said that could take up to a year.
As of the end of November, Nuclear Development "had not made substantive progress ... so we were unable to complete the sale," TVA spokesman Jim Hopson told Utility Dive. According to the utility, the Atomic Energy Act requires the NRC to approve the transfer of the construction licenses.
Nuclear Development has a different interpretation, and has asked the U.S. District Court for the Northern District of Alabama, Northeastern Division, to weigh in on the matter.
According to the company's lawsuit, "TVA's interpretation of the Atomic Energy Act's application to the contract is erroneous. The transfer of the Bellefonte Site and its improvements in their current condition to Nuclear Development does not violate the NRC Permits, the NRC regulations, or the Atomic Energy Act."
In addition, the transfer of the NRC permits is not a prerequisite to closing the sale of Bellefonte, according to Nuclear Development. The company says it has already paid TVA more than $30 million under the contract, "and expended additional millions of dollars in engineering, consulting, and regulatory fees, all in reliance upon closing the transaction as contracted."
As of Nov. 30, Nuclear Development told the court, it was "ready, willing and able" to cut a check for $91.6 million to close the deal.
But even with the sale completed, there is still work to do before Bellefonte's future can be assured.
In order to secure loan guarantees from the Department of Energy, Nuclear Development needs assurances from Memphis Light, Gas and Water that it will purchase the plant's output and has asked for a letter that would bind the municipal utility to the terms of a power purchase agreement.
Memphis Light, Gas and Water told Utility Dive that would be "premature" before it does its due diligence and receives "independent feedback on a multitude of concerns."
While the court considers Nuclear Development's petition and development at the Vogtle plant in Georgia inches ahead, developers of smaller, experimental nuclear power reactors see an opportunity.
Small modular reactors (SMR) could be developed more quickly and cheaply, experts say, and could lead to a rebirth of nuclear energy in the United States. The MIT Energy Initiative earlier this fall warned that nuclear energy is being underutilized worldwide, and suggested smaller reactors and other cost-reduction strategies to boost the industry.
- Memphis Business Journal Private nuclear deal with TVA dead for now, lawsuit filed
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