After approving plans to finish a long-mothballed reactor project at the Tennessee Valley Authority’s Bellefonte site, TVA announced it would pay for the completion by selling assets that include another reactor, rather than issue bonds.
The Knoxville News Sentinel quoted a TVA spokesman as saying after Thursday’s TVA board meeting that the agency will finance the $4.9 billion Bellefonte project by lease-back sales of the Watts Bar unit 2 reactor and a gas-fired power plant. TVA would maintain operational responsibility for the reactor after selling it and entering an arrangement to lease the unit from its new owner.
TVA currently has $24.3 billion in outstanding debt. Issuing more bonds to pay for Bellefonte could push the agency close to its statutory $30 billion debt limit, which is one reason a spokesman said TVA leadership favors a lease-back arrangement as opposed to the less-expensive financing available through debt issuance.
Watts Bar unit 2 is scheduled to be complete next year. Restarted in 2007, the project calls for a second Westinghouse pressurized water reactor that will generate 1,180 megawatts, according to TVA. The estimated cost to complete the reactor southwest of Knoxville, Tenn., is $2.5 billion.