A federal U.S. judge has denied a request for expedited hearing of a suit against the Tennessee Valley Authority for allegedly reneging on its sale of an unfinished Alabama nuclear power plant.
U.S. District Court Judge Liles Burke on Dec. 27, 2018, rejected the request for an expedited hearing by Franklin Haney Sr., the would-be buyer of the Bellefonte nuclear project in northeast Alabama that was left unfinished in 1988.
However, to prevent any delay ruining Haney's plans to try to finish Bellefonte, Judge Burke adopted the plaintiff's proposed stipulations that TVA "will satisfy the quality assurance and other requirements" of two construction permits issued by the U.S. Nuclear Regulatory Commission for Bellefonte's units 1 and 2. If TVA moves to terminate its construction permits or sell the site to another buyer, the federal utility must also give the court at least a five days advance notice, Burke said.
Haney had accused TVA of breaching a contract to complete the sale of the unfinished two-unit Bellefonte facility for $111 million. TVA agreed to sell Bellefonte in November 2016 and Haney made a $22 million down payment. The two parties had until the end of November 2018 to close the deal but TVA pulled out on Nov. 30, 2018, claiming that under the Atomic Energy Act Haney's Nuclear Development LLC first needed the NRC's permission to transfer the construction permits.
The lawsuit recalled that TVA first raised the issue of permit transfers only after it agreed on Nov. 8, 2018, to extend the closing deadline a few weeks to the end of the month. Nuclear Development on Nov. 13, 2018, asked the NRC to approve the transfer of two deferred construction permits but said it was not required to do so prior to the closing. By then, the developer said it had already paid TVA more than $30 million under the contract and expended additional millions of dollars in engineering, consulting and regulatory fees on the project.
Haney's lawsuit asked the court to order TVA to sell Bellefonte to Nuclear Development under the contract and to issue a preliminary injunction to ensure that TVA maintains the facility and its construction permit until the sale is completed. If the sale does not go through, Haney wants TVA to pay more than $60 million in damages.
TVA spokesman Jim Hopson said in an email that TVA's position has not changed regarding Nuclear Development's "lack of progress in meeting its legal obligations" and said TVA will be filing more formal responses to the lawsuit's allegations in coming weeks. "We remain committed to returning the Bellefonte property to productive use to benefit the residents of northeastern Alabama as soon as possible," said Hopson.
In a Jan. 7 email, NRC spokesman Scott Burnell said NRC staff continues to work on its review of Bellefonte's permit transfer but could not provide "any substantive update."
Bellefonte's two 1,256-MW pressurized water reactors were approximately 90% and 58% complete in 1988 when work on them was halted. After years of TVA scavenging Bellefonte for reusable equipment, Canadian nuclear construction firm SNC-Lavalin (S.A.) Inc., which was hired by Nuclear Development, estimated that unit 1 remains roughly 55% complete and could cost between $3 billion and $5.5 billion to complete. Lavalin had aimed to have the facility generating electricity by 2024.
With the TVA having no interest in purchasing electricity from Bellefonte, Haney's plans to finish the nuclear plant also depended upon the city of Memphis, Tenn., signing a 30-year power purchase agreement with Bellefonte. Memphis Light Gas and Water Division signed a nonbinding letter of intent in January 2018 to buy up to 1,340 MW of power from Bellefonte unit 1 for $39 per MWh — almost half of what the utility currently pays TVA for power — to meet 80% of the city's basic power needs. However, Memphis Light refused to sign an updated nonbinding agreement until due diligence of Nuclear Development's proposal was completed, which was slated to be published in December 2018. Haney needed the updated agreement to secure an $8.6 billion loan from the U.S. Department of Energy to finalize the facility's purchase.