A class action lawsuit has been filed on behalf of investors who purchased NuScale securities between March 15, 2023, and November 8, 2023, following the cancellation of NuScale’s Carbon Free Power Project (CFPP).

The complaint filed in the class action alleges that throughout March 15, 2023, and November 8, 2023, NuScale made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the company’s business, operations, and prospects.

Specifically, the complaint alleges that NuScale failed to disclose to investors that because of the effect of inflationary pressures on the cost of construction and power, the company and Utah Associated Municipal Power Systems (UAMPS) would be unable to sign up enough subscribers to fulfill the CFPP. Additionally, the suit says Standard Power did not have the financial ability to support its agreement with NuScale; and as a result, NuScale’s positive statements about the company’s business, operations, and prospects were materially misleading and/or “lacked a reasonable basis at all relevant times.”

On October 19, 2023, Iceberg Research published a report alleging, among other things, that NuScale would be unable to fulfill its contract with the UAMPS for its CFPP, as well as a contract with Standard Power, a company providing data center services for businesses focusing on blockchain mining and high-performance computing applications.

On this news, NuScale’s stock price fell $0.58, or 11.5%, to close at $4.46 per share on October 19, 2023. Then, on November 8, 2023, NuScale and UAMPS announced that they had mutually agreed to terminate the CFPP contract due to failing to engage enough subscribers. Following this news, NuScale’s stock price fell $1.02, or or 32.9%, to close at $2.08 per share on November 9, 2023.

The project, envisioned near Idaho Falls, Idaho, at the DOE’s Idaho National Laboratory, would have been NuScale’s first SMR plant to begin operation in the U.S. The plant would have deployed six, 77-MW modules to generate 462 MW of electricity.

The development was a major blow to U.S. nuclear ambitions. NuScale is one of several companies working to build and commercialize SMRs. Like other companies, NuScale was targeting the end of the decade for deployment.

Because of their relatively small physical footprints, reduced capital investment, and more flexible siting, these smaller reactors are viewed as an antidote to the cost overruns that have plagued large-scale nuclear projects.

Earlier this year NuScale said the target price for power from its plant ballooned to $89/MWh, up from a previous estimate of $58/MWh. NuScale said Oct. 8 that despite efforts by all parties to advance the CFPP, it appeared unlikely that the project will have enough subscription to continue toward deployment.

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