8-K: NuScale Acquires Key Reactor Materials Post-Project Termination

NuScale Power has entered a tri-party agreement to acquire long lead materials from the terminated Carbon Free Power Project for $32.3 million, ensuring their future use.

Summary

• NuScale Power, LLC, a subsidiary, entered into a Tri-Party Agreement with the U.S. Department of Energy (DOE) and CFPP LLC on September 22, 2025.
• The agreement addresses the disposition of certain upper reactor pressure vessel long lead materials (LLM Assets) that were produced for the Carbon Free Power Project (CFPP), which was terminated in November 2023.
• NuScale will acquire all of CFPP's rights, title, and interests in the LLM Assets for a total consideration of $32,322,870.89.
• The payment by NuScale to CFPP will be executed through the issuance of credit invoices totaling $40,919,833.12, which reverses amounts previously paid by CFPP under Task Order 1A and 1B, resulting in the net consideration of $32,322,870.89.
• CFPP is obligated to remit $32,322,870.89 to the DOE within three business days of receiving funds from NuScale, representing full reimbursement of DOE's financial contribution.
• The transaction must close on or before October 1, 2025; otherwise, CFPP will transfer the LLM Assets to the DOE.
• Upon successful completion, NuScale will become the sole legal owner of the LLM Assets, with full and exclusive rights to possess, use, modify, transfer, license, or otherwise dispose of them.
• NuScale will submit no further invoices to CFPP for Task Order 1A or 1B, and CFPP has no obligation to pay outstanding invoices related to these task orders.
• NuScale remains interested in obtaining licenses to use other project assets, including the final bill of materials, overall project schedule, and Class 2 cost estimate, and the DOE has agreed to engage in further discussions on this matter.

Sentiment

Score: 7

Explanation: While the underlying project (CFPP) was terminated, NuScale is proactively securing valuable long lead materials, which could be beneficial for future SMR deployments. The transaction resolves an asset disposition issue and potentially reduces future costs and lead times for NuScale. The payment mechanism is structured as a reimbursement, not a new cash outlay.

Positives

• NuScale secures ownership of valuable long lead materials (LLM Assets) for $32,322,870.89, which were originally produced for the terminated Carbon Free Power Project.
• The acquisition provides NuScale with full and exclusive rights to possess, use, modify, transfer, license, or dispose of these critical reactor components without restriction.
• The payment mechanism involves credit invoices, effectively a reimbursement process, rather than a new cash outflow for NuScale, as it reverses funds previously paid by CFPP.
• The agreement resolves the disposition of assets from the terminated Carbon Free Power Project, providing clarity and securing materials that could be utilized in future NuScale SMR deployments.
• The DOE has agreed to engage in further discussions with NuScale regarding other project assets, such as the final bill of materials, overall project schedule, and Class 2 cost estimate, which could provide additional strategic value.

Negatives

• The underlying Carbon Free Power Project (CFPP), for which these materials were initially produced, was terminated in November 2023, indicating a past project failure.
• The transaction involves a significant financial consideration of $32,322,870.89, even if structured as a credit invoice reimbursement, representing a cost associated with a past project.

Risks

• Failure to close the transaction on or before October 1, 2025, would result in CFPP transferring the LLM Assets to the DOE, and NuScale would not acquire them.
• If CFPP fails to remit the $32,322,870.89 payment to the DOE within three business days of receiving funds from NuScale, CFPP would be obligated to refund NuScale, and the DOE would not release its rights to the assets.
• NuScale's ability to fully leverage the acquired LLM Assets depends on their compatibility with future projects and successful integration into new development plans.
• The agreement does not immediately grant NuScale access to other desired project assets like the final bill of materials, overall project schedule, and Class 2 cost estimate, requiring further discussions with the DOE.

Future Outlook

NuScale Power aims to leverage the acquired long lead materials for future small modular reactor projects. The company also intends to pursue further discussions with the U.S. Department of Energy to gain access to additional project assets from the terminated Carbon Free Power Project, such as the final bill of materials, overall project schedule, and Class 2 cost estimate, which could provide valuable insights and resources for ongoing and future SMR development.

Management Comments

• NuScale will acquire all of CFPP's right, title and interests in and to certain long lead time materials identified in the Agreement that were produced in support of the Carbon Free Power Project, for total consideration of $32,322,870.89, to be paid by the issuance of credit invoices to CFPP.
• NuScale remains interested in identifying a path towards receiving license to use other project assets (in particular, the final bill of materials, overall project schedule, and Class 2 cost estimate).

Industry Context

The acquisition of long lead materials by NuScale Power, a leader in small modular reactor (SMR) technology, highlights the strategic importance of securing critical components for nuclear energy projects. While the termination of the Carbon Free Power Project (CFPP) in November 2023 underscores the challenges and complexities inherent in large-scale energy infrastructure development, NuScale's move to acquire these assets demonstrates a proactive approach to mitigating supply chain risks and potentially accelerating future SMR deployments. This action positions NuScale to potentially reuse these materials, reducing future capital expenditures and lead times, which is crucial in the competitive and capital-intensive nuclear energy sector.

Comparison to Industry Standards

• This transaction is an asset disposition and acquisition following a project termination, rather than a performance report, making direct comparison to industry-standard financial benchmarks or project results difficult.
• However, the strategic acquisition of long lead materials (LLM) from a terminated project is a common practice in capital-intensive industries like nuclear, aerospace, or large-scale infrastructure, where specialized components have long manufacturing times and high costs. Companies like Westinghouse or GE Hitachi Nuclear Energy might similarly seek to recover or repurpose valuable assets from stalled or canceled projects to minimize losses and leverage investments for future endeavors.
• The ability to secure these materials, potentially for reuse in other NuScale Power Module (NPM) projects, could be seen as a prudent risk mitigation and cost-saving measure, aligning with best practices for managing assets in long-cycle industrial projects.

Stakeholder Impact

• Shareholders: Potential positive impact as NuScale secures valuable assets that could be reused in future projects, potentially reducing future capital expenditures and accelerating development timelines. This also resolves an outstanding issue from a terminated project.
• U.S. Department of Energy (DOE): Receives full reimbursement of its financial contribution towards the LLM Assets, closing out its involvement in this specific aspect of the terminated CFPP award.
• CFPP LLC: Disposes of its rights to the LLM Assets and fulfills its obligation to reimburse the DOE, effectively closing out its role in this part of the project.

Next Steps

• NuScale and CFPP must ensure the transaction closes on or before October 1, 2025.
• CFPP must remit $32,322,870.89 to the DOE within three business days of receiving funds from NuScale.
• DOE will issue a written release of its rights to the LLM Assets upon confirmed receipt of payment.
• NuScale and DOE will engage in further discussions regarding NuScale's access to other CFPP project assets, including the final bill of materials, overall project schedule, and Class 2 cost estimate.

Key Dates

Recommendation

This filing details a strategic asset acquisition that resolves a legacy issue from a terminated project. While it doesn't provide direct financial performance metrics, securing these long lead materials is a prudent move that could benefit NuScale's future SMR development by potentially reducing costs and lead times. The transaction is structured as a reimbursement, limiting new cash outflow. However, it's not a catalyst for immediate significant upside, nor does it indicate new operational challenges beyond the past project termination. Therefore, a 'hold' recommendation is appropriate as investors should await further updates on NuScale's core SMR deployment progress and financial results.

Keywords

NuScale Power, SMR, Small Modular Reactor, DOE, Department of Energy, CFPP, Carbon Free Power Project, Long Lead Materials, Reactor Pressure Vessel, Nuclear Energy, Asset Acquisition, SEC Filing, 8-K