GOP states sue NRC to deregulate SMR licensing

The GOP governors and their respective offices of state attorneys general (in one case the top GOP state legislators) in Texas, Utah, Florida, Louisiana, and Arizona have joined together with a number of fledgling nuclear start-up companies still in the design development phase for new, unproven small modular reactors (SMR) in a lawsuit filed in U.S. District Court for the Eastern District of Texas Tyler Division against the U.S. Nuclear Regulatory Commission (NRC).*

The lawsuit argues that reactor licensing requirements for  microreactors and SMRs—with power outputs ranging from 1 to 300 megawatts electric (MWe)—do not need to be as stringent on safety requirements as the nation’s  predecessor of behemoth commercial nuclear power plants in operation today. The plaintiffs claim, that because SMRs are significantly smaller they are inherently safer such that states regulatory authorities in collaboration with the nuclear industry would be sufficient to take control of licensing of SMR development from the NRC. This would include reactor independent design safety certification and construction. The plaintiffs have further claimed that offsite radiological emergency planning and environmental protection from a nuclear accident would no longer be necessary much farther than the reactor site exclusion fence line and can be safely operated within denser population zones.

This premise ignores the fact that the intent of the modular design allows for multiple units to be co-located, closely congregated and even operated from a single control room on a power scale potentially larger than even current conventional commercially  light water nuclear reactor stations generating thousands of megawatts.  Numerous common mode failures from singular, simultaneous and cascading events including internal design and material failures, external events including severe floods, earthquakes, and deliberate acts of malice cannot be totally ruled out.

With various SMR design concepts still in the development phase and some launching pilot ventures in the United States, they still face numerous challenges to demonstrate operational safety, obtain necessary approvals, build supply chains that including higher enriched nuclear fuel and develop a customer base. But the same issues of failure to control projected cost-of-completion and meet projected time-to-completion have already arisen in SMR development even to meet their goals on paper.

For example, the US Department of Energy’s much touted  pet project in Idaho, NuScale Power’s 50 MWe VOYGR™ SMR power plant is the only design thus far that managed to eke out a contorted “conditional” design safety certification in 2023 from an obliging NRC and build its projected market with a power purchase agreement with the Utah Municipal Association of Power Suppliers (UAMPS) in several western states. The 50 MWe certified design itself instead turned out to be a “house-of-cards” and collapsed when uncontrolled costs and delays for the implementation of the design proved uneconomical for commercial production.  Nevertheless, the state and the nascent industry plaintiffs are proceeding with their argument that it is NRC’s regulations and overly safety-oriented bureaucratic barriers that are stifling the deployment of  otherwise innovative and “inherently safe”  reactors.

The industry and its supporters have further blamed the NRC’s burdensome regulations as responsible for the collapse of the nation’s first attempt at its so-called “nuclear renaissance” with advanced Generation III reactor projects launched by the congressional passage of the Energy Policy Act of 2005 (EPACT). In fact, EPACT was tailored by Congress and a very willing NRC to streamline a new combined operating license process (COL), a one-stop construction and power operations permit. EPACT bolstered the industry launch with billions of dollars in federal production tax credits and loan guarantees. EPACT  also  ramrodded  a twenty year extension of the Price-Anderson Act further indemnifying nuclear corporations with limited liability from the potentially astronomical costly radiological damages of severe nuclear accidents by the so-called “inherently safe” Generation III light water reactor designs.

Despite Congress’ thorough greasing of the skid for a new generation of reactor development and deployment, by 2007, the industry had proposed  34+ new units cited to the Congressional Research Service for construction. Of the pledged units, the industry submitted COL applications to the NRC for 25 units. The NRC  and industry efforts managed to approve COL permits for 14 units. Of those 14 units, the nuclear industry (even with the taxpayer backed federal loan guarantees and tax credits) only risked the financing for the construction of four units (Vogtle 3 & 4 and V.C. Summer 2 & 3). Only two units of the four units managed to complete construction and go into commercial operation in 2023 and 2024—more than double their original estimated cost-of-completion (roughly $36+ billion for Vogtle Units 3 & 4 in Georgia) and seven years behind schedule. The V.C. Summer units proposed for South Carolina were abandoned mid-construction in July 2017 with uncontrolled costs and recurring delays resulting in nearly $10 billion in sunk costs largely passed onto captured state electric ratepayers. The remainder of the industry applications were suspended or withdrawn by the utilities without the financial confidence to break ground for construction.

In our view, after curtailing streamlining the new licensing process, the NRC steamrolled new combined construction and operations licensing over the public’s due process to fully participate in the process. However, rather than solely fault the NRC, it was the historic, recurrence of uncontrollable cost overruns and prolonged delays in the new reactor licensing process, environmental reviews and unreliable reactor time to completion of construction that actually stifled the deployment of new reactor technologies internationally and not at all unique to the United States and NRC licensing oversight.

This is now compounded by Congress’ 2024 passage of the Accelerating Deployment of Versatile, Advanced Nuclear for Clean Energy (ADVANCE) Act to fundamentally remove any pretense of the NRC  mission statement’s focus from,

“The NRC licenses and regulates the nation’s civilian use of radioactive materials to provide reasonable assurance of adequate protection of public health and safety and to promote the common defense and security and to protect the environment”

to now,

“The NRC protects public health and safety and advances the nation’s common defense and security by enabling the safe and secure use and deployment of civilian nuclear energy technologies and radioactive materials through efficient and reliable licensing, oversight, and regulation for the benefit of society and the environment.”

The nuclear industry, including the plaintiffs Last Energy, Next Generation, Deep Fission and  Valar Atomics are now calling upon the US federal district court to rule upon a very dangerous and inestimably expensive course to deregulate federal control of commercial nuclear power development essentially by exemption and turn it over to the nuclear industry to instruct the individual states.

*CORRECTION: The two top legislators for the GOP majority Arizona State House [Senate President Warren Petersen (R-Gilbert) and House Speaker Steve Montenegro (R-Goodyear)] separately filed as parties in the NRC law suit.