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Tennessee investor pushes private/public plan to complete TVA's Bellefonte n-plant; utility says plan is not operative

From the January 6, 2014 issue of Public Power Daily

Originally published January 6, 2014

By Jeannine Anderson

Tennessee financier and multimillionaire Franklin Haney is continuing to push his idea that the Tennessee Valley Authority ought to team up with private investors to finish building at least one of two reactors at the mothballed Bellefonte nuclear power plant in Alabama. But TVA says that, at least for now, it foresees no need for the power.

The Haney proposal "is not an operative proposal because we cannot justify, in the near term, completing the plant to meet the needs of our customers," TVA President Bill Johnson said in November.

In 2011, TVA estimated that the cost to complete a reactor at Bellefonte would be $4.9 billion. But when the TVA board of directors met in November, Johnson said the new preliminary estimate for finishing one of the reactors is in the range of $7.4 billion to $8.7 billion.

Haney first suggested a sale-leaseback plan to help finance work at Bellefonte more than 10 years ago. This year, he teamed up with former TVA Chairman Dennis Bottorff to try to convince TVA to let them help it complete the Bellefonte plant. Energy experts at global bank Credit Suisse are involved in the plan, according to the Chattanooga Times Free Press.

Haney and Bottorff spoke with members of Tennessee's congressional delegation in September about their proposal to finish Bellefonte, possibly as early as 2018. As private investors, they would qualify for federal tax incentives for new nuclear generation, they said -- incentives that will expire in 2021. 

TVA's debt stands at $26 billion today, and Congress has directed that the federal utility not ever exceed $30 billion in debt. Bottorff and Haney have said an infusion of private money would help TVA avoid any problems running up against that debt limit. 

Haney "has spent much of this year lobbying Congress, TVA distributors and industrial customers," the Times Free Press reported in November.

"The unsolicited offer from investors doesn't fit with our plans at the present time," TVA spokesman Duncan Mansfield told Public Power Daily Dec. 3. 

Growth in the demand for power in TVA's seven-state service territory "has dropped dramatically," Mansfield said. The utility does not expect to see the kind of demand for electricity it had in 2007 for another decade, he said.

It doesn't help that TVA lost its biggest single customer earlier this year, when the Energy Department closed down the U.S. Enrichment Corp.'s plant in Paducah, Ky., he said. USEC has filed for bankruptcy protection, The New York Times reported Dec. 16.

Meanwhile, TVA is working to complete the second unit at its Watts Bar plant in Tennessee. The utility hopes to have that reactor on line in late 2015, Mansfield said.

Earlier this fall, TVA decided to retire a large amount of its coal-fired generating capacity. (See "TVA to retire eight coal-fired units at three of its power plants," in the Nov. 18 Public Power Daily.)

TVA's board voted on Nov. 14 "to change the plant's status because it no longer is under active development," the Times Free Press reported. 



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Senior Vice President, Publishing 
Jeanne Wickline LaBella

Editorial Director
Robert Varela

Editor, Public Power Daily
Jeannine Anderson

Communications Assistant
Fallon W. Forbush

Manager, Integrated Media 
David L. Blaylock

Integrated Media Editor 
Laura D’Alessandro