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HUNTSVILLE, Ala. — A federal court has ruled against a Chattanooga development group in its lawsuit against TVA over the uncompleted sale of the unfinished Bellefonte Nuclear plant in Jackson County.

The ruling was a win for TVA, but it also directs the utility to repay Nuclear Development LLC $22.9 million the developer gave as a down payment for the property. TVA is also required to pay back that figure with 7.5 percent annual interest, dating back to December 2018.

TVA and Nuclear Development had entered an agreement for TVA to sell the site for $111 million, after Nuclear Development won an auction for the property in 2016. The developer was given two years to complete the deal, which was set to close in November 2018.

Supporters of the completion of Bellefonte estimated construction would generate thousands of jobs over several years and the permanent plant would also employ more than 1,000 people.

Construction at Bellefonte began in the early 1970s and was halted by TVA – facing nuclear cost overruns – in the mid 1980s. TVA has spent an estimated $5 billion on the plant. Estimates to complete it vary, with TVA saying it could cost up to $8.7 billion to complete one reactor and Nuclear Development suggesting it could complete both reactors for about $8 billion.

But TVA pulled out of the deal, arguing the developer had failed to secure necessary construction permits from the Nuclear Regulatory Commission.  Nuclear Development filed a lawsuit the same day, arguing the permits weren’t necessary for the sale and that TVA breached the sales contract by failing to assist in securing the permits.

The court issued a summary judgment ruling in April, finding that TVA was not at fault. But, it also set a trial to resolve additional matters in dispute, including whether TVA made the deal impossible by not assisting with the NRC permits. The trial was held in May.

In today’s court order, U.S. District Judge Liles Burke offered his findings of fact, which included the note that Chattanooga-based developer Franklin Haney had been interested in the Bellefonte site since 2002; that he and his family had started Nuclear Development in 2012 to finish the construction on Bellefonte’s two reactors; that TVA decided to sell Bellefonte in 2016 and the utility acknowledged a “competitive risk” could occur by selling the units to another entity that would then sell electricity in TVA’s market.

The findings of fact note that counsel for Nuclear Development began working on the permits issue in March 2018, and that at some point a TVA attorney became concerned that there could be a problem with the sale without NRC approval; lawyers for the two sides spoke in October with Nuclear Development’s counsel asking TVA to review a proposed letter to the NRC concerning the transfer of construction permits from TVA to Nuclear Development; later TVA’s attorney suggested it provide a consent letter, but not submit a permit transfer request on Nuclear Development’s behalf.

The court also found that while TVA’s lawyer was uncomfortable with how the process was unfolding, Nuclear Development’s lawyer was confident the request would find favor with NRC and did not ask TVA to submit its consent letter to NRC; TVA notified Nuclear Development in early November of its concerns about closing the deal with the unresolved construction permits issue.

Judge Burke’s findings of fact note that though those concerns had been raised in October 2018, the November email was the first time it was formally raised; at the same time, executives from the two sides were in conflict, after Nuclear Development’s CEO suggested to the City of Memphis’ utility – TVA’s largest customer – that it should leave TVA and go to Nuclear Development.

TVA granted a short extension of the closing date to the end of November 2018, but declined an earlier request by Nuclear Development for a six-month extension.

The night before the closing, TVA told Nuclear Development it would not go through with it.