The Tennessee Valley Authority just can’t seem to get rid of its long mothballed Bellefonte construction project in Alabama. It’s a convoluted story, with deep roots in the collapse of the boom for nuclear power, particularly at TVA in the 1970s, which came home in the 1980s.
At the end of August, as the AP reported, a federal district court judge ruled in favor of TVA that the giant federal power agency had not breached a contract with a dubious firm which had agreed to buy the failed two-unit Babcock & Wilcox pressurized water reactor project at aptly-named Hollywood, Alabama, in 2016 for $111 million, well above the $36 million minimum bid TVA put on the property. The successful bidder, Nuclear Development LLC, headed by a Chattanooga real estate developer Franklin Haney, who has been heavily involved in investing in Washington, D.C., properties.
TVA pulled out of the deal in late 2018, citing the inability of Haney to get timely approval for transfer of the site and the construction project license from the U.S. Nuclear Regulatory Commission. Haney, who formed Nuclear Development in 2012 to acquire the two abandoned 1,300-MW Bellefonte units, sued TVA charging breach of contract.
The district court ruling concluded that TVA acted lawfully in ending the deal. But the decision was costly for TVA. In addition to its own legal costs, the power system was ordered to return a $22 million deposit on the sale. It was now again holding a white elephant asset of dubious value.
While Haney’s firm has its headquarters in Washington, he is well connected to his home state of Tennessee and its political establishment. Haney’s head of Nuclear Development, Bill McCollum, was TVA’s chief operating officer, hired in 2017. Haney also contributed to former Vice President Al Gore, and former Tennessee Democratic senator, in his 2008 campaign and former President Donald Trump’s 2016 campaign. He also reportedly hire former Trump fixer and convicted felon Michael Cohen to work on obtaining federal funding for the Bellefonte deal, which was unsuccessful.
At the height of former TVA chairman Red Wagner’s love affair with nuclear, construction began at the two Bellefonte units in 1975. When the power system stopped construction in 1998, with projections of declining demand for electricity, unit 1 was 88% complete and unit two and estimated 58% finished. At that point, TVA had invested about $6 billion in the project.
In a statement, TVA said of the recent court decision, “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.”
What’s next in this complex, twisting tale. Who knows?
–Kennedy Maize