A federal judge has ruled that TVA did not breach a contract to sell Bellefonte Nuclear Plant in Alabama to a company run by former Chattanooga developer Franklin Haney.
But U.S. District Judge Liles Burke ordered TVA to pay $22.9 million plus interest to Haney's company, Nuclear Development LLC.
Haney had hoped the court would order TVA to sell him the incomplete power plant.
TVA invested more than $5 billion to design and build the two Babcock & Wilcox reactors on the Tennessee River in Hollywood, Alabama.
But after nearly a half century of starts and stops on the project, TVA abandoned the nuclear project more than five years ago when it proved too expensive to finish and TVA's power growth slowed.
TVA directors voted in May 2016 to dispose of the 1,400-acre riverfront property.
Haney, a wealthy developer who has built numerous TVA offices and other real estate projects in the past, emerged as the top bidder for the Bellefonte plant in an auction in November 2016 when Nuclear Development offered to buy the 1,400-acre site for $111 million.
Haney spent more than a decade trying to line up federal loan guarantees and investments to finish Bellefonte and insisted that the partially built reactors could be completed and deliver power at an attractive cost.
However, the prospective deal fell apart days before the sale was to be completed and Nuclear Development filed suit against TVA in November 2018 with the case tried in May of this year.
TVA spokesman Jim Hopson said Friday that the utility is extremely pleased with the 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," he said.
Hopson said 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," he said.
The judge said in his ruling that, with no breach by TVA of its obligations, Nuclear Development is entitled neither to specific performance nor to damages.
However, the judge said that as the deal was terminated due to failure to satisfy all closing conditions, TVA is obliged to return the down payment and any compensated costs paid by Nuclear Development.
He ordered TVA to return the down payment of $22.2 million and compensated costs of $750,000. Also, the judge ordered Nuclear Development to receive pre-judgment interest at a rate of 7.5% per annum running from Dec. 30, 2018, to the date of the order.
Still, Hopson said the court found that TVA did not conceal its concerns about the illegality of proceeding without Nuclear Development first receiving the required Nuclear Regulatory Commission approval.
He also said the court found that TVA did not delay Nuclear Development's efforts to seek a license transfer from the NRC, and was under no legal obligation to extend the closing deadline or actively join Nuclear Development's untimely efforts to obtain NRC approval of the license transfer.