TVA withdraws from nuclear power plant sale raises green questions
Normally, a lawsuit involving a nuclear power plant would attract national attention.
But there has been a major struggle going on over an unfinished nuclear power plant in Hollywood, Alabama, and not a word has caught national media attention. Even in the area affected by this lawsuit, served by the giant Tennessee Valley Authority (TVA), coverage has been modest. The importance of new green energy was not raised, which is the background story here.
The single-judge trial, which opened in Huntsville, Alabama on May 16 and ended three days later, involves the two units of TVA’s Bellefonte nuclear power plant.
TVA started construction of the plant in 1975 and then suspended it. Later, TVA restarted construction and finally put the plant on the back burner in 2o15.
A year later, TVA declared the factory surplus to its needs and put it up for sale. This attracted only three bidders and one special purpose company, Nuclear Development LLC, won. It was the top bidder at just $ 111 million. Two lower bidders planned to cannibalize the factory and ship parts to other factories, some overseas.
TVA accepted Nuclear Development’s offer without reservation, or none was expressed. According to Nuclear Development, the company carried out the plant’s inventory and the usual due diligence before closing the deal after two years.
When the deal was due to be concluded in November 2018, TVA first requested a two-week extension and then canceled the deal, claiming the buyer had not obtained the necessary licenses transferred from the Nuclear Regulatory Commission. , as required by the Atomic Energy Act. The judge has already said so in a pre-trial notice.
TVA told me in a statement: “Nuclear development had two years to get the necessary approval from the Nuclear Regulatory Commission to transfer the building permits issued by the NRC to Bellefonte. Nuclear Development did not get NRC approval prior to closing, making it illegal for TVA to close the sale.
Bill McCollum, president of Nuclear Development, told me that the license issue was not raised between the sale in 2016 and the abrupt change of mind about to sign in November 2018. NRC did not been a party to the lawsuit and no other federal agency was established. After the cancellation, Nuclear Development immediately sued for breach of contract.
The dispute is significant in the national context with the Biden administration working to end carbon emissions from power generation and the two Bellefonte units together representing 2,700 megawatts of clean green energy.
There is some controversy over the progress of the plant, but Unit 1 is rated 88% by the buyer and Unit 2 at around 58%.
McCollum knows the plant: A career nuclear engineer, he was Chief Operating Officer at TVA until his retirement in 2011. Previously, he served 33 years in the highly respected nuclear program at Duke Energy.
Nuclear Development is owned by Franklin Haney of Chattanooga and his family, who amassed a fortune in real estate development in Tennessee and surrounding Washington, DC.
Creative financing was Haney’s specialty, and he had devised a plan to complete the Bellefonte plant using private financing and federal tax credits and loan guarantees. He first shared this possible plan with TVA in 2013 – so it’s been germinating for a long time.
Haney had worked with TVA on creative financing for another nuclear project. There was a known amount of VAT.
Buyer sources believe TVA pulled out when it realized that Nuclear Development wanted to sell its power generation from Bellefonte to the city of Memphis, TVA’s biggest customer, at a discount. Otherwise, he could have made the sale conditional on license transfers.
In an age when clean air is a national priority, it appears the Alabama litigation is more than a trade dispute. It is an environmental issue. After all, TVA is an independent federal agency and the NRC is an independent federal commission. Couldn’t they have settled the licensing problem before there were legal punches?
During my years of writing on TVA, he was always a nuclear champion and deeply aware of his social responsibility, being born in the New Deal.