A US district judge on 28 August ruled in favour of the Tennessee Valley Authority (TVA) in the legal dispute over the sale of the Bellefonte NPP near Scottsboro in Alabama, but said the utility must refund millions of dollars over the aborted deal. Judge Liles Burke ruled TVA did not violate its sales contract and had no obligation to extend the closing deadline for the company, Nuclear Development, to buy the facility.
In 2016, Nuclear Development had agreed to buy the site for $111 million but in 2018 filed a lawsuit in federal court accusing the TVA of illegally pulling out of the sale a day before closing. TVA, in turn, argued that Nuclear Development had failed to get Nuclear Regulatory Commission approval for transfer of the construction permits in time for the closing deadline. Nuclear Development said TVA pulled out of the sale because of concerns that it would lose customers to the company. Burke ruled that the motives of TVA officials ultimately did not matter because the company had failed to meet the requirement of the deal and the utility had no obligation to extend the deadline.
However, Burke said TVA must return the $22 million down payment for the property, plus interest. “We are extremely pleased with this outcome. The court clearly validated our longstanding position that TVA did not breach its contractual duty to cooperate and use best efforts to complete the sale of Bellefonte to Nuclear Development,” the company said in a statement.
“TVA retains full possession and control of the Bellefonte site. We continue to evaluate the court’s order and look forward to moving toward returning the Bellefonte property to productive use.” TVA began work at the Bellefonte site in the mid-1970s, but it never finished the two-reactor plant in face of a decrease in the demand for electricity.
A construction permits for the two 1,200MWe Babcock & Wilcox pressurised water reactors at Bellefonte were originally issued in 1974, but TVA ceased construction in 1988 when unit 1 was about 90% complete and unit 2 was 58% complete. TVA restarted work on one of the reactors, but in 2014 froze the project again. TVA’s board of directors in 2016 decided that Bellefonte was surplus property and began accepting offers for third parties to purchase the site.
Nuclear Development was set up in 2012 specifically to acquire, finance, complete, and operate the reactors and signed a contract in November 2016 to buy the facility from TVA at auction for $111 million, three times the minimum bid of $36.4m sought by TVA.
Nuclear Development said it provided detailed plans to invest up to $13bn to complete construction. However, just 24 hours before the sale was scheduled to close in 2018, TVA’s previous leadership pulled out of the deal, citing a technicality that construction permits must be approved by NRC before the transaction could be completed.