NuScale Power (NYSE:SMR) saw its stock plummet 7.6% to $8.35 on Monday, marking a fresh 52-week low and an 85.5% decline from its October high. The sharp selloff has refocused investor attention on the company's complex and potentially costly agreement with the Tennessee Valley Authority (TVA).
Under the current terms of the TVA framework, a firm commitment for all 72 planned reactor modules would trigger a second payment to ENTRA1 Energy of approximately $1.18 billion. This payment is contingent on a power purchase agreement (PPA), which NuScale management has indicated could be finalized this year. A PPA is a long-term contract for the sale of electricity.
NuScale's annual filing reveals that achieving the PPA milestone would cost about $16 million per NuScale Power Module, even if ENTRA1 has not yet signed a revenue-generating supply deal. The equipment-manufacturing agreement is only required at the third payment stage, creating a significant financial exposure before any product revenue is secured.
The ENTRA1 contract structures module payments in three phases. NuScale has already recorded $507.4 million in costs since the non-binding TVA framework for 72 modules. Assuming a 15%-35%-50% payment split, the estimated breakdown is as follows:
- Project Framework (15%): $507.4 million – already spent
- Firm PPA (35%): $1.18 billion – not yet booked
- Contract to Build (50%): $1.69 billion – not yet booked
- Total: $3.38 billion
This leaves approximately $2.88 billion in potential future payments. NuScale stated that as of March 31, it had not recorded a liability for the two later phases. The projected $1.18 billion second payment aligns with the just over $1.2 billion in cash CFO Ramsey Hamady reported in early May.
NuScale's financials underscore the strain. First-quarter revenue was a mere $565,000, with a net loss of $46.7 million. The company burned through $314.7 million in cash, largely due to a $259.9 million payout to ENTRA1. The initial $507.4 million payment was roughly 898 times quarterly revenue and consumed nearly half of the company's liquidity as of March.
Monday's decline occurred amid a broader risk-off rotation out of early-stage nuclear names. The S&P 500 fell 0.8% and the Nasdaq Composite slid 1.6%, driven by rising U.S.-Iran tensions that boosted oil prices and hit tech stocks. Other nuclear developers like Oklo (NYSE:OKLO) and Nano Nuclear Energy (NASDAQ:NNE) also declined, but NuScale suffered the steepest drop.
Despite a regulatory edge—the U.S. Nuclear Regulatory Commission cleared its revised 77-megawatt small modular reactor in May 2025—NuScale has yet to sign any binding module supply contract. The company has flagged potential production or design delays that could push first delivery to 2031 or later.
CEO John Hopkins described the commercialization effort as 'complicated' and slow, while CFO Hamady expressed hope for a TVA PPA later this year. He noted about $8 million in revenue from early Romanian project work as an example of services revenue that might precede equipment orders. However, the funding gap is stark: early services generate millions, but the PPA-related payment exceeds $1 billion.
The $2.88 billion exposure estimate is not a forecast for immediate outflow; a final TVA deal might involve fewer than 72 modules, and payments depend on contract caps and timing. If the second-stage payment arrives before equipment revenue, it could strain liquidity or force additional share sales. As of March, NuScale had approval to sell up to $962.1 million more in its open-market program.
Investors will look for details on cash, share sales, ENTRA1-related liabilities, and the TVA deal's module count when NuScale reports Q2 results on August 5. For now, the stock's plunge suggests traders view the next commercial milestone as both a technology test and a likely capital raise.
