TVA has extended an agreement with the Southern Co. that could lead to construction of one of the first new nuclear plants in more than three decades.

The "memorandum of intent" with Southern Co. of Atlanta expired June 1 but has been extended by the two utilities for six months.

The two are looking at a joint project at the mothballed Bellefonte Nuclear Plant near Scottsboro, Ala.

"It's clearly to determine if a project would be beneficial to TVA and the Southern Co.," said Jack Bailey, TVA vice president of nuclear generation development. "If both parties determine it's feasible and beneficial to enter into a contract, we would do so. Otherwise, either party could walk away at any time. It doesn't obligate us."

The memorandum allows the two companies to explore the feasibility of a partnership to build a new plant, said TVA spokesman John Moulton.

TVA and the Southern Co. are part of NuStart Energy Development LLC, the largest consortium of nuclear power companies, which is interested in building a new nuclear plant. NuStart has chosen two possible sites for the plant - Bellefonte and Port Gibson, Miss.

If TVA proceeds with the project, it would apply for an operating license for the plant through the U.S. Nuclear Regulatory Commission in October 2007. It would take about three years for NRC approval, Bailey said. Construction could begin in 2010.

"One of the problems of new nuclear plants is it takes nine or 10 years (to complete)," Bailey said. "The way to shorten that is to get a license in your pocket, then decide when to build it. We don't have to make a decision to build toady. We would try to get the license first, then decide to build later."

Before TVA commences with such a project, the agency must determine that the additional electricity that would be generated is needed in the seven-state Tennessee Valley. And it would need approval by the TVA board of directors.

NuStart is considering two designs for the new nuclear generation plant - by General Electric, and by the Westinghouse Advanced Passive 1000 design that would be used by TVA at Bellefonte.

The AP 1000 uses natural circulation or gravity to perform safety functions, Bailey said. For example, a tank of water would be located on top of the reactor containment building. In the event of a loss of reactor coolant, the valves would open and the water from the tank would drain down by gravity, cooling the reactor. The core of a reactor must be covered by water to keep it cool.

"It means it's safer to build and safer to operate," Bailey said of the new design.

Bellefonte was one of several nuclear plants TVA began construction on in the 1970s. However, the agency determined it would not need the power that would be generated by all of those plants and chose not to complete Bellefonte and Watts Bar Unit 2 at Spring City.

Business writer Rebecca Ferrar may be reached at 865-342-6357.