Despite cost overruns and plant cancellations by major utilities in the South, Franklin L. Haney is convinced he can finish two reactors at an abandoned Alabama nuclear plant in the next five years and sell electricity at a competitive price.
Haney, a 76-year-old former Chattanooga developer who amassed a fortune building offices, hotels and roads across the country, agreed last November to buy the Bellefonte Nuclear Power Plant for $111 million and became the first individual in the world to own a nuclear power plant. Haney said Friday he has an agreement with prospective customers to buy the power the 1,256-megawatt Bellefonte Unit 1 would generate, and he is looking for customers to buy the electricity the second unit at Bellefonte could produce by 2023.
"As I have been preaching for years, it's a crying shame if this plant is never built," Haney said Friday during a meeting with directors of EPB, one of TVA's biggest municipal customers. "If Bellefonte is cheaper, which I'm confident it will be, why wouldn't you take its power?"
Haney is looking for some help from Chattanooga and Huntsville, Ala., to convince the Tennessee Valley Authority to buy some of his power, and said he is willing to provide to EPB and the Huntsville Utilities Board as much as $25 million to $50 million a year of the tax credits he could get over the next eight years if Bellefonte is built and finished. Haney had a similar meeting recently with the Huntsville Utilities Board, which is also reviewing his proposal.
TVA abandoned the twin-reactor plant in Hollywood, Ala., after 42 years of construction starts and stops and billions of dollars of construction, engineering and interest expenses.
› Location: On the Tennessee River in Hollywood, Ala.
› Power: Two units can generate 2,512 megawatts
› History: TVA started construction in 1974 and suspended work in 1988
› Sale: Haney’s Nuclear Development LLC agreed to buy Bellefonte within two years of the November 2016 sales agreement for $111 million
› Completion cost: $13.4 billion, offset by tax credits
› Job creation: 4,500 jobs during construction
› Alabama subsidies: Direct subsidies, job credits and investment credits on $13.4 billion investment of $2.4 billion
› Federal credits: DOE production tax credits for Advanced Nuclear Facility of $2 billion
The company calculated it would cost too much to finish Bellefonte and its power may never be needed, as consumption in the Tennessee Valley is now projected to decline for the first time in TVA's 84-year history.
"Our long-range integrated resource plan determined that we will not need any more baseload power for at least the next decade and that hasn't changed," TVA spokesman Scott Brooks said Friday.
But Haney said he has since talked with engineers who are convinced the completion can be done for less than what TVA thought, and as a private investor, he hopes to tap into up to $5 billion in tax credits for finishing the Babcock & Wilcox-designed reactors.
Haney said the projected $13 billion cost to finish both reactors, minus the $5 billion in tax credits, would give him new reactors with a 60- to 80-year life for about $4 billion each, or only about half of what Georgia Power Co. is now spending to build new reactors at its Plant Vogtle.
Because of its design, Bellefonte also could benefit from the mixed oxide fuel the Department of Energy is trying to develop from recovered bomb materials from disarmament agreements. But the MOX plant in South Carolina where such fuel would be made — and which could provide a virtually free source of nuclear fuel for Bellefonte — has stalled amid its own budget and completion problems.
"Our power price is going to be equal to, or less, than that from natural gas plants," Haney said. "The ratepayers of the [Tennessee] Valley have over eight to 10 billion dollars of their money in Bellefonte already so these units are already built, in large measure."
Haney said he plans to put the construction completion out for bids to major nuclear contractors once he is able to finalize designs, financing and other details. He declined to disclose any customers so far, but he said an announcement is coming.
Anti-nuclear groups question whether regulators will easily approve the transfer of the license to Haney and whether the Bellefonte plant, which was designed in the 1960s and on which construction began in the 1970s, will have trouble meeting today's standards. Some of the key parts of the plant, including its steam generator, were sold for scrap parts in the 1990s when TVA thought it was going to replace the plant with a next-generation design.
Haney has until November 2018 to complete his purchase of the Bellefonte plant from TVA.
Former Chattanooga Mayor Jon Kinsey, who once worked for Haney and now is a member of the EPB board, recently toured Bellefonte and said he was impressed by the condition and near completion of the plant.
"It does look like it is ready to operate," Kinsey said. "If we in Chattanooga are becoming more of a regional hub, we need to recognize that a lot of the folks who would work on building this plant will live or shop in our city."
Kinsey noted that one of the managers at Bellefonte lives off of Highway 58 in Chattanooga.
Kinsey and other EPB board members directed EPB's chief financial officer, Greg Eaves, to review Haney's proposal, which could include up to $200 million of shared tax credits that EPB could use to build its business.
"We're not asking any distributors to change their contract with TVA," Haney said. "We want to help TVA."
Haney said Bellefonte power could substitute for gas-generated power TVA now buys from Capital Power from a 615-megawatt gas-fired plant in Decatur, Ala.
Wes Kelley, president of the Huntsville Utilities Board, said Haney met with the Huntsville utility and, in response, the municipal power company wrote a letter thanking him and asking for updates as Haney proceeds with his project.
"I think until Mr. Haney completes his due diligence and his financial projections, I think the question about the cost effectiveness for TVA to buy this power is still an open question," Kelley said. "This project could certainly have an important economic development impact on northern Alabama, and we'd like to stay abreast of his continued progress."
Contact staff writer Dave Flessner at email@example.com or 423-757-6340.