I’ve relearned a valuable lesson — read press releases and other PR material closely, paying special attention to wiggle words.
On Friday, March 4, Bechtel issued a press release titled Bechtel, BWXT to Pursue Acceleration of Small Modular Nuclear Reactor Project.
In my excitement, I missed the key word in the headline and in the first paragraph — pursue.
It turns out that the agreement between Bechtel and BWXT gives Bechtel one year to pursue additional investors or funding sources. If, within that year, Bechtel is able to put together sufficient funds to submit and complete a design certification application, the involved parties will negotiate a new agreement.
Bechtel has the sole responsibility of determining if the funding commitments are adequate.
BWXT agrees to provide in kind engineering and support services to Bechtel during the search process in an amount not to exceed $10 million at labor rates that are not yet finalized. If the project does move forward, BWXT will continue to provide engineering and other support services for a total of five years at no more than $12 million/year. That limits BWXT’s additional investment commitment in the mPower project to $60 million.
If Bechtel cannot find adequate funding within one year of the agreement date, BWXT will pay Bechtel $30 million to settle all existing claims remaining from the Generation mPower partnership. GmP will be dissolved and all associated exclusivity agreements will be eliminated.
In my last post on this topic, I mentioned that the agreement announcement meant that the lawyers had finished talking. When B&W chose to dramatically slow its investment in the project, its minority partners (DOE, BPC, and TVA) were not pleased about the decision or the amount of warning they received.
According to some written sources I found but cannot point to right now, BPC had an active litigation in process with a damage claim of $120 million.
There are other specifics available from BWXT’s filing with the SEC. Since Bechtel Power Corporation is a privately held company, they are not required to make a similar filing as a result of making a materially significant agreement.
Note: If Bechtel is unable to attract the outside funds it believes it needs, that situation should not be interpreted as having anything to do with the overall prospects for smaller nuclear power plants. The BWXT mPower reactor and associated power plant as designed by GmP has both advantages and disadvantages. It is a specific product from a specific set of suppliers. It is just one of an infinite number of systems with various features, price points, customer relationship teams and potential delivery schedules.