Franklin L. Haney said he is ready to complete his proposed $ 111 million purchase of the Bellefonte Nuclear Power Plant in Alabama today, taking his biggest step yet towards becoming the first individual investor to own and build a U.S. nuclear power plant.
But the Tennessee Valley Authority, which stopped building its Bellefonte reactors 30 years ago and agreed to sell the units to Haney in 2016, says it can not complete the sale without regulatory approval for transferring the construction permits on the nuclear units.
"We were unable to complete the transaction today," TVA spokesman Jim Hopson said today. "(Haney's company) Nuclear Development did not complete the necessary NRC license transfer prior to the closing date as required by the Atomic Energy Act."
Although Haney asked for TVA to continue working on the license transfer while the regulators reviewed his application, Hopson said 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, "Hopson said.
Haney submitted his application to the US Nuclear Regulatory Commission to take over the project earlier this month, but NRC's staff are still reviewing the request from Haney's Nuclear Development LLC to transfer the construction permits. TVA originally obtained when it began building Bellefonte in 1974.
"A day before the closing , TVA tells me that they can not close the deal, but our attorney does not agree, "Haney said today in an interview from his beachfront home in Manalapan, Florida. "Nobody told us there was any problem before now."
Haney said he talked Thursday night with TVA President Bill Johnson and asked for a 6-month extension of the sales agreement for The Bellefonte assets, which Haney agreed to buy when he submitted the winning bid at a TVA public auction in November 2016. Johnson agreed earlier this month to a 16-day extension of the Bellefonte with Haney sales agreement until today, but Hopson said TVA Haney, a 78-year-old real estate investor who has owned and leased properties across the country with a variety of federal agencies, including TVA, said he has spent the past two years working with engineering, design and construction contractors reviewing the status of Bellefonte and working out a plan for its completion. Haney has hired the Montreal-based engineering firm of SNC-Lavalin to complete the Bellefonte plant.
Completing Bellefonte would create 8,000 to 10,000 jobs in Northeast Alabama and the Chattanooga region, and when completed within five years, the plant could produce power at $ 39 per megawatt tour, or only about half of TVA's average $ 72 per megawatt hour rate, Haney said
"The millionaire investor said he is confident he can finish the reators in five years at a $ 7 billion cost, or $ 3.5 billion.
" This is about jobs, jobs, jobs and cheaper, cleaner power, "Haney said. per reator – less than half what TVA projected it would cost to complete the units. Haney said he is investing $ 500 million of his own money in the project and SNC and other builders and engineers are also investing in fixed-cost contracts for the work.
But anti-nuclear groups question how the plant could be finished after TVA gutted some of its equipment and other parts of the plant pre-date the digital era. Most nuclear power project, including the most recent ones built at Watts Bar, Vogtle and V.C. Haney has hired former TVA Chief Operating Officer Bill McCollum to help oversee the project. But Johnson noted that McCollum previously estimated that Watts Bar Unit 2 – the last U.S. nuclear plant to be finished – would cost $ 2.5 billion to finish, but the plant ended up costing almost twice as much.
McCollum said the Bellefonte developers hope to capitalize on the limited demand for nuclear power equipment and builders to gain discounts and fixed costs about 70 percent of the remaining work on the plant.
MCollum said Nuclear Development LLC is not buying a completed nuclear plant that needs a license transfer, but only the equipment and assets to build the new plant and TVA
"To pray at the nuclear plant two years ago when we indicated our desire to complete the plant, you had to be a qualified bidder capable of financing and completing the deal, which we did to the satisfaction of TVA, "McCollum said.
But the US Nuclear Regulatory Commission, which must approve the transfer of construction permit, is still reviewing an application which Nuclear Development filed this month, NRC spokesman Scott Burnell said today.
Haney has also applied for nearly $ 5 billion of federal loan guarantees from the US Department of Energy under a program designed to spur more new nuclear power plants to be built. Haney said he could start construction on the unit 1 reactor at Bellefonte within six months of obtaining a federal loan guarantee for the project.
In 2015, TVA-energieplanners besloten het gebruik zou niet nodig hebben om de macht dan Bellefonte zou kunnen genereren voor 2033 en de TVA-raad stemt in mei 2016 om zich te ontdoen van de nuclear plant site.
In September, 2016, Haney submitted a purchase offer for Bellefonte through a negotiated sale. As a government utility, TVA ultimately put the 1,300-acre Bellefonte site up for sale at public auction in November 2016 and Haney's Nuclear Development LLC was the top bidder at $ 111 million.
Haney paid TVA $ 22 million for a down payment on the site to years ago. Since then, Haney says he has spent millions and millions of dollars to maintain the facility and hire contractors to plot a plan to finish the nuclear plant.
TVA estimates it has spent $ 4.8 billion on the Bellefonte plant, not including interest on the investments made over the past 44 years. Haney estimates the total amount spent by TVA that Bellefonte probably approaches $ 9 billion.
Since construction was started in 1974, TVA made the decision to start and stop construction three different times.
Before scrapping its plans to finish Bellefonte, TVA estimated in November 2013 that the Unit 1 reactor could be completed at a cost of $ 7.5 billion to $ 8.7 billion, which was almost double the previous $ 4.9 billion completion cost estimate made two years earlier.
As a private entity, Haney's Nuclear Development LLC will qualify for $ 2.3 billion of federal tax credits that TVA as a government agency would not. As an independent power producer, Nuclear Development will also be able to sell its power on the grid to any willing buyer.
Haney has approached TVA's largest customer, Memphis Light, Gas and Water, about buying Bellefonte-powered power for less than what TVA charges for its electricity. Haney claims he could cut the power bill for MLGW at $ 487 million a year or as much as $ 14 billion over 30 years.
But under TVA's contract with MLGW and the other 154 TVA distributors, the distributors must purchase all of their power from TVA.
Haney has received endorsements for his project from Alabama US Reps. Mo Brooks, Martha Roby and Bradley Byrne and from Tennessee congressional members on both sides of the state urging DOE and the city of Memphis to consider Haney's proposals.
U.S. Rep. Steve Cohen, a Memphis Democrat who served as Shelby County chairman of Haney's 1974 gubernatorial campaign, helped arrange a meeting last week between Haney's team and Memphis Mayor Jim Strickland.
"Memphis is one of the nation's poorest cities and accordingly its residents have a very high energy burden as measured by the percentage of their income they pay for electricity. Therefore, any opportunity to save on this basic necessity is of the utmost importance to my constituents, '' Rep. Cohen said in a statement to the Institute for Public Service Reporting in Memphis.
The Memphis utility has hired a consultant to evaluate whether MLGW may split with TVA in the future and buy its power from other sources, including Nuclear Development and the Midcontinent Independent System Operator or MISO, a nonprofit regional power transmission organization operating in all or parts of 15 states in the West, Midwest and South, including Arkansas.
"MLGW is awaiting the res ults of a study on various possible energy sources. At the receiving that study, scheduled for sometime in December, staff and I will assess those results, "MLGW President and CEO JT Young told The Daily Memphian." The approval process to change providers of electricity is the same regardless of who that alternate provider would be. "
TVA officials, including Johnson, have urged Memphis officials to be wary about buying power from other unproven identities like Haney and have questioned if their rates will remain attractive over the long term.