TVA claims Bellefonte buyer could not meet deadlines

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*UPDATE TVA responded to our request for comment:

On Nov. 30, 2018, the parties were unable to complete the sale of the Bellefonte property after Nuclear Development’s lack of progress in meeting its legal obligations related to future ownership of the site. Nuclear Development did not complete the necessary Nuclear Regulatory Commission license transfer prior to the closing date as required by the Atomic Energy Act
 TVA declined to provide a second contract extension beyond the nearly 25 months already provided due to Nuclear Development’s lack of diligence in completing these required activities. We remain committed to returning the Bellefonte property to productive use to benefit the residents of northeastern Alabama as soon as possible.

Nuclear Development, LLC was to have closed on its deal for the Bellefonte Nuclear Plant with TVA. However, that deal came to a halt after TVA refused to go through with the sale.

Nuclear Development, LLC has now filed a suit against TVA. The suit reads, “TVA declared the BLN Property to be surplus property and decided to sell the unfinished plant and property at auction.  Nuclear Development submitted the winning bid and, on November 14, 2016, entered into a purchase and sales agreement with TVA captioned “Bellefonte Nuclear Plant Site Purchase and Sales Agreement.”

“The Contract provides that TVA will sell and Nuclear Development will purchase approximately 1,400 acres of the BLN Property as described in the Contract (the “Bellefonte Site”).  The sale and purchase was originally agreed to close on November 14, 2018, but the parties amended the Contract to extend the closing date to November 30, 2018.”

“Nuclear Development applied to the NRC for approval of the transfer to Nuclear Development of two deferred construction permits CPPR-122 and -123 (the “NRC Permits”) previously issued by the NRC to TVA authorizing TVA to finish constructing the nuclear facility at the Bellefonte Site.

“After the First Amendment to the Contract was signed, TVA opined that under Section 101 of the Atomic Energy Act, 42 U.S.C. § 2131, the NRC must approve the transfer of the NRC Permits to Nuclear Development before TVA may transfer the Bellefonte Site to Nuclear Development.   By this point, however, Nuclear Development had already paid TVA $30,094,231 under the Contract and expended additional millions of dollars in engineering, consulting, and regulatory fees, all in reliance upon closing the transaction as contracted.”

“TVA’s interpretation of the Atomic Energy Act’s application to the Contract is erroneous.  The transfer of the Bellefonte Site and its improvements in their current condition to Nuclear Development does not violate the NRC Permits, the NRC regulations, or the Atomic Energy Act.   Moreover, the transfer of the NRC Permits is not a prerequisite to closing under the Contract.”

“In contrast with its last-minute contention, TVA represented and warranted in 2016 under Section 7(a) of the Contract that it had full authority to transfer the Bellefonte Site to Nuclear Development and that “no authorization, consent or approval or other order or action” of any Governmental Authority was necessary to  consummate the transaction.”

“TVA also made representations to the same effect on August 21, 2018, when it advised Nuclear Development that it was proceeding with documentation for the closing.  TVA has known of the provisions of the Atomic Energy Act for decades, and until six days before the originally scheduled closing date never once contended that the Act required the NRC to approve the transfer of the NRC Permits to Nuclear Development before the closing of the sale of the Bellefonte Site could occur.”

“On multiple occasions and as recently as the week of closing, Nuclear Development reiterated its request that TVA agree to delay the closing date to eliminate the permit transfer issue, but TVA refused.”

“Despite its representations in the Contract that it had full authority to consummate the sale  without  the  need  for  any  governmental approval, on November 29, 2018, TVA advised Nuclear Development that it did not intend to close on November 30, 2018 because the NRC had not yet approved Nuclear Development’s NRC Permit transfer approval applications.”

NRC’s suit says TVA breached the contract by refusing to consummate the deal.

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