TVA says buyer for Bellefonte Nuclear Plant can’t meet contract deadline, sale appears off

HOLLYWOOD, Ala. - TVA says Nuclear Development LLC is unable to meet contract terms to complete $111 million sale of Bellefonte Nuclear Plant.

TVA sent out the following statement:

"On Nov. 30, 2018, the parties were unable to complete the sale of the Bellefonte property after Nuclear Development’s lack of progress in meeting its legal obligations related to future ownership of the site. Nuclear Development did not complete the necessary NRC license transfer prior to the closing date as required by the Atomic Energy Act."

But, Nuclear Development LLC disputes that description. Former U.S. Rep. Bud Cramer, a spokesman for the group, said it was prepared to close the deal today, but TVA was unwilling to close the sale. Nuclear Development had been working on the project, including paying plant upkeep costs, Cramer said. The failure to close the deal today is unlikely to be the last word on the issue.

Nuclear Development's attorney sent TVA a letter disputing its reasons for failing to allow the deal to close. It says TVA's claims that the sale would be unlawful because Nuclear Development doesn't have a license for a production facility is incorrect, since at this point Bellefonte isn't capable of producing nuclear material.  It also faults TVA for raising the issue just six days before the sale deadline.

Nuclear Development argued that it offered to extend the sale deadline to resolve the issue with federal regulators, but TVA declined to do so.

Nuclear Development won an auction in 2016 with an $111 million bid to buy the plant. The balance of that payment, $89 million, was due today.

 TVA said in its statement, "TVA declined to provide a contract extension beyond the nearly 25 months already provided due to Nuclear Development’s lack of diligence in completing these required activities. We remain committed to returning the Bellefonte property to productive use to benefit the residents of northeastern Alabama as soon as possible."

But Nuclear Development's letter to TVA also argues, "The absurdity of your position is illustrated by your attempt to blame ND for this situation."

The letter adds, "TVA has been aware of ND's position on the permit transfers most of the pre-closing period and never raised an issue with it until six days before the original closing date."

Construction on the plant in Hollywood began back in 1974. But TVA pulled the plug on the project in 1988 in the midst of cost overruns and rising debt.

There have been a number of stops and starts since 1988. TVA says it considered a number of alternative uses for the site, including a coal plant, a natural gas plant, an advanced nuclear reactor plant and mixed commercial and residential uses. TVA figured the plant wasn’t worth it and an inspector general report found it would cost $7.5 to $8.7 billion to finish one reactor.

So far, TVA says it has spent $4.8 billion on Bellefonte.

There are a number of moving parts, but Friday marked a deadline.

Nuclear Development is also seeking government money to pay to complete the two unfinished reactors at Bellefonte. It says since the plants have about half the work completed, they can be completed in a cost-effective way.

The group’s CEO, Bill McCollum, says they are seeking up to $8.5 billion in government loans for the project. But Nuclear Development needs a big customer to help convince the U.S. Department of Energy that Bellefonte is a viable project. Right now, they’re still waiting on Memphis Light, Gas & Water to say if it will pursue a power purchase agreement from a completed Bellefonte. The utility said it is waiting on a power market analysis, due in December, that will help guide its thinking on future power needs.

Haney has also indicated Nuclear Development is seeking incentive money from Alabama.

State economic development officials wouldn’t comment on if they’d been approached for incentives, but Haney told the Institute for Public Service Reporting at the University of Memphis last week, they’re seeking $1 billion in incentives from Alabama. That’s actually more than the new Mazda Toyota plant got for the Huntsville facility.

Friday evening, Nuclear Development, LLC filed an motion requesting an injunction against the TVA to stop any further sale or redevelopment of the site, claiming a breach of contract. Additionally, Nuclear Development, LLC requested an expedited hearing.

To read the full motion, click here.