TVA drops plan to complete Bellefonte nuclear plant

Friday, November 15, 2013 5:20 PM ET Exclusive
TVA drops plan to complete Bellefonte nuclear plant

By Matthew Bandyk

The Tennessee Valley Authority has stopped active work on finishing the decades-old Bellefonte nuclear plant, putting to rest, at least for now, a controversial proposal from private investors to put up money to complete the project.

Along with the utility's dramatic decision to retire 3,000 MW of coal-fired generation, TVA's board of directors on Nov. 14 moved to shift the status of the Bellefonte plant from active development to inactive, revealing that the cost estimate for finishing the first of the two planned reactors would be "substantially larger" than previously expected, according to TVA spokesman Duncan Mansfield.

When the board voted to complete Bellefonte in 2011, the estimate was $4.9 billion. But it has since grown to a range from $7.4 billion to $8.7 billion, TVA President and CEO Bill Johnson said at the Nov. 14 meeting.

The change to inactive development does not mean the plant can never be finished. The door is open for TVA to resume work. "It continues to be a valuable asset and who knows what the future holds," Johnson said, as reported by the Chattanooga, Tenn., Times Free Press on Nov. 15. "If we get a couple of big auto plants or other industry and we need the power, we could have a different discussion."

But the board's decision could be another step toward permanently ending the project.

"I see every indication that they are closing the coffin and nailing it shut," Southern Alliance for Clean Energy Executive Director Stephen Smith said Nov. 15. "It's already a highly, highly questionable project based on its age and now you have the CEO and a number of board members saying we don't need this."

TVA had already slowed the project down. In June, the utility cut the budget for the project to about $66 million for fiscal year 2014, down from $182 million in fiscal year 2013. The board's Nov. 14 vote does not affect the budget, Mansfield said.

The utility has been planning Bellefonte since the 1970s, but the project stalled in the 1980s as its price tag soared.

A prominent attempt to resurrect the project came this year when a group of investors, including former TVA Chairman Dennis Bottorff, proposed using private financing to cover most of the cost of finishing the plant, which the group said was about $11 billion. TVA would ground lease the plant to a private company and then buy Bellefonte's output through a power purchase agreement, according to the plan.

The Southern Alliance, an environmental group that for years has called for TVA to give up on Bellefonte, criticized the plan as unrealistic. TVA's own estimates differed from the group's numbers — a September presentation from the utility said that constructing Bellefonte unit 1 alone would cost $8.1 billion, including financing costs.

While the TVA board did not formally reject the investor group's plan, ending active development essentially means the idea will not be pursued. "Their proposal is not an operative proposal because we cannot justify, in the near term, completing the plant to meet the needs of our customers," Johnson said, according to the Times Free Press.

Bottorff did not respond to an email seeking comment on the board's action.