Former TVA Chairman Dennis Bottorff and financier Franklin L. Haney are trying to make money at the expense of the Tennessee Valley Authority through their proposal to finish the Bellefonte Nuclear Plant using private funds and federal tax credits, an environmental group charged Tuesday.
Stephen Smith, executive director for the Southern Alliance for Clean Energy, said those pushing a $10 billion financing plan to pay for TVA to complete its twin-reactor Bellefonte plant "are trying to enrich themselves at the expense of TVA ratepayers." Smith said the private financing plan for Bellefonte is based upon faulty assumptions.
But Bottorff, a retired Nashville banker who has worked with dozens of companies and government agencies, said he is simply trying to help TVA meet its mission and take advantage of one of its biggest unused assets. The unfinished Bellefonte plant, he said, could be completed by 2021 and generate power at a lower cost than either TVA's fixing aging coal plants or using natural gas plants that may be hurt by rising fuel prices.
"If you want low-cost, reliable and clean energy, this is certainly the best option," Bottorff said."TVA is in a unique position to have an asset like Bellefonte that could be finished and produce power for 60 years at a very competitive rate."
Franklin Haney, a former Chattanooga financier who is retired in Florida, has been working with Wall Street bankers to help finance the completion of Bellefonte for TVA since he first proposed a lease-back arrangement for the plant a decade ago. Finishing Bellefonte with private funds would help TVA stay beneath its Congressionally imposed debt ceiling of $30 billion. If power production starts at plant by 2021 under private ownership, it would also qualify for up to $2 billion of production tax credits.
As a government-owned utility, TVA couldn't quality for the federal tax credits. But if structured properly, the outside financiers for Bellefonte could quality for the credits, even if the plant were operated and controlled by TVA.
But just how much Bellefonte will cost and how soon TVA could finish its construction is a matter of debate. Bottorff said top energy analysts with Credit Suisse and TVA's former chief operating officer, Bill McCollum, estimate both Bellefonte reactors could be finished for $11 billion and operate at a fraction of the fuel expense of other energy sources.
TVA spokesman Duncan Mansfield said utility officials are still studying Haney's financing offer and talking with Credit Suisse officials. But a preliminary TVA estimate for finishing just one of the units at Bellefonte last month listed the price at $8.1 billion.
"The proposal from Mr. Haney is interesting and intriguing, but it's unrealistic in terms of what it promises," said John Wilson, director of research at the Southern Alliance for Clean Energy.
Wilson said getting the required second 500-kilovolt electric line to Bellefonte by 2021 would be difficult, if not impossible.
Smith said Bellefonte was designed in the 1960s, started in 1974, halted in 1988 and then gutted, in part, in 2006 and 2007 when TVA thought it wasn't going to finish the plant.
"It would be 50 years old if it was finished before it even operated," he said. "This is a plant that was built during an era when TVA's had a poor construction record and it hasn't been maintained adequately through the years."
U.S. Senate and U.S. House members in the Tennessee Valley have voiced support for finishing Bellefonte, and Smith said he worries that too much politics may interfere in TVA's decision about the nuclear plant future.
"We need an open and transparent process for future power planning, which is what the new Integrated Resource Plan we just began should offer to TVA," Smith said.
Contact Dave Flessner at email@example.com or at 757-6340