Activists denounce 'zombie' Bellefonte Nuclear Plant as regulators consider license transfer for new owner to finish facility

A year after the Tennessee Valley Authority tried to terminate the sale of its Bellefonte Nuclear Plant because the buyer didn't have a nuclear license, the Nuclear Regulatory Commission is moving ahead to consider such a license transfer.

Former Chattanooga developer Franklin L. Haney, who is trying to become the first individual American to finish and own a commercial nuclear plant, submitted additional information this year in his attempt to gain the first transfer for a construction permit of an unfinished nuclear plant in the United States.

Haney's Nuclear Development LLC won the bidding at a November 2016 auction by TVA of the Bellefonte site with his $111 million bid. But the sale was never completed because TVA claimed Haney had failed to obtain the required permission from federal regulators to transfer the construction permit at Bellefonte.

Haney didn't submit his request for such a license transfer to the U.S. Nuclear Regulatory Commission until November 2018 and regulators said the initial request was incomplete and could not be processed. But after TVA tried to scrap the sale of Bellefonte, Haney sued TVA to maintain the sales agreement and a court ruled this spring that the dispute over the plant sale must proceed to trial, which is likely in 2020.

While TVA and Haney squabble over the sale of Bellefonte, the Nuclear Regulatory Commission is proceeding with reviewing the plans submitted by Nuclear Development LLC, including additional filings this year to supplement what regulators said initially were inadequate reports about the proposed buyers.

"The NRC staff will review the transfer application for the existing permits, separately from any potential hearing on the matter," NRC spokesman Scott Burnell said Tuesday.

If the NRC approves the transfer of the construction permit, the main problem blocking TVA from completing the sale of Bellefonte would be resolved, although TVA could still argue that Haney failed to get the license transfer in the specified period for the closing.

Nuclear Development wants the construction permit to allow up to 10 years to finish the two Bellefonte reactors, which TVA initially began planning and designing nearly a half century ago.

TVA started work on developing Bellefonte in 1974 but suspended the project in 1988. The federal utility spent $5 billion on the project since the 1970s and said it would take nearly $9 billion to finish just one reactor. But Haney's Nuclear Development claimed it can build two reactors for less than that - about $8 billion.

Anti-nuclear activists, who have denounced Bellefonte as a "zombie nuclear plant" because it never seems to die, question the merits of transferring a construction permit on the twin-reactor plant to a company with no previous experience in building nuclear plants.

Staff Photo by Dan Henry / The Chattanooga Times Free Press- 11/14/16. Franklin Haney, representing his company Nuclear Development, LLC., bids against Aaron Abadi, the CEO of National Environmental Group representing Jackson Holdings, during an auction of Tennessee Valley Authority's Bellefonte Nuclear Power Plant in Hollywood, Alabama, on Monday, November 14, 2016. Nuclear Development, LLC., won the auction with a bid of $111,000,000.00 entering them into a contract to purchase the currently non-operational power plant. The purchasers stated in a press release that the project is expected to require an additional investment of up to $13-billion to complete and will create over 3,000 temporary construction jobs and an estimated 2,000 full time jobs when fully operational.

"That NRC would even consider reducing rules for licensing to help revive Bellefonte is not in the best interest of people's health," said Sandy Kurtz, a Chattanooga environmental community activist and chair of the South Chickamauga Creek Greenway Alliance, "NRC is only considering such reductions because would-be buyer Haney put forth the request that retired nuclear plants only have to meet safety standards that were in place when the facility last operated. Since Bellefonte was first begun, we have had many additional safety regulations including Fukushma that should not be ignored."

Garry Morgan, who lives near the plant in Scottsboro and has long questioned the merits of the facility, said during the many starts and stops of work on the Bellefonte plant over the past 45 years, "the nuclear plant was cannibalized and stripped of critical components during the period of license surrender.

"From all indications and reports, quality assurance documentation ceased during this period," Morgan said. "There are no reports indicating the quality assurance documentation on materials, systems and parts stripped have been reestablished."

But SNC-Lavalin, a Canadian nuclear construction firm Haney hired to evaluate Bellefonte, said most of the Bellefonte facility is still useful and estimated that the Unit 1 reactor at Bellefonte could be finished for about $3 billion - only a fraction of what Georgia Power is spending to built new nuclear reactors at its Plant Vogtle in Georgia.

Bellefonte Nuclear Plant is pictured Monday, July 30, 2018, in Hollywood, Alabama. Nuclear Development LLC successfully bid $111 million for the Bellefonte site, with its two partially-built pressurized water reactors plus infrastructure, including switchyards, office buildings, warehouses, cooling towers, water pumping stations and railroad spurs. / Staff file photo by Erin O. Smith

Aided by more than $2 billion in production tax credits for new nuclear generation allocated for Bellefonte and the prospect of up to $5 billion or more in federal loan guarantees for the project, Haney claimed three years ago he should be able to finish both Bellefonte reactors at a cost that would allow him to deliver power as much as $500 million a year cheaper for electricity users.

But Haney, a former Chattanooga real estate developer who now lives in south Florida, has no previous experience owning or operating a nuclear plant.

Haney has amassed a fortune over the past four decades buying, developing and leasing properties to TVA, the Internal Revenue Service and other government agencies and airports, along with hotels, office buildings and other developments. He came under Congressional criticism when it was revealed he briefly hired the former personal attorney to President Donald Trump, Michael Cohen, to try to get federal loan guarantees and foreign investors involved in the project.

Comments on Haney's proposal to finish the plant must be filed by Dec. 23, and a request for a hearing on the transfer of the construction permit for Bellefonte must be filed by Dec. 11.

Despite criticism of the license transfer by some environmentalists, NRC spokesman Scott Burnell said the NRC staff is not aware of any comments being submitted about the license transfer so far.

Contact Dave Flessner at dflessner@timesfreepress.com or at 757-6340.