Lawsuit challenges NRC on SMR regulation

Friday, 10 January 2025

Under the US Nuclear Regulatory Commission (NRC) Utilization Facility Rule, all US reactors are required to obtain NRC construction and operating licences regardless of their size, the amount of nuclear material they use or the risks associated with their operation. The plaintiffs say this imposes "complicated, costly, and time-intensive requirements that even the smallest and safest SMRs and microreactors - down to those not strong enough to power an LED lightbulb" must satisfy to secure the necessary licences. This does not only affect microreactors: existing research and test reactors such as those at the universities in both Texas and Utah face "significant costs" to maintain their NRC operating licences, the plaintiffs say.

In the filing, Last Energy - developer of the PWR-20 microreactor - says it has invested "tens of millions of dollars" in developing small nuclear reactor technology, including USD2 million on manufacturing efforts in Texas alone, and has agreements to develop more than 50 nuclear reactor facilities across Europe. But although it has a "preference" to build in the USA, "Last Energy nonetheless has concluded it is only feasible to develop its projects abroad in order to access alternative regulatory frameworks that incorporate a de minimis standard for nuclear power permitting".

Noting that only three new commercial reactors have been built in the USA over the past 28 years, the plaintiffs say building a new commercial reactor of any size in the country has become "virtually impossible" due to the rule, which it says is a "misreading" of the NRC's own scope of authority.

They are asking the court to set aside the rule, "at least as applied to certain small, non-hazardous reactors", and exempt their research reactors and Last Energy’s small modular reactors (SMRs) from the commission's licensing requirements.

Turning point
 

Houston, Texas-based law firm King & Spalding said the lawsuit, if it is successful, would "mark a turning point" in the US nuclear regulatory framework - but warns that it could also create greater uncertainty as advanced nuclear technologies get closer to commercial readiness.

"Regardless the outcome, the Plaintiffs’ lawsuit highlights the challenges in applying the Utilization Facility Rule to the advanced nuclear reactors now under development in the US," the company said in in analysis released on 9 January.

But the NRC is already addressing the issue: in 2023, it began the rulemaking process to establish an optional technology-inclusive regulatory framework for new commercial advanced nuclear reactors, which would include risk-informed and performance-based methods "flexible and practicable for application to a variety of advanced reactor technologies". SECY-23-0021: Proposed Rule: Risk-Informed, Technology-Inclusive Regulatory Framework for Advanced Reactors is currently open for public comment until 28 February, and the NRC has said it expects to issue a final rule "no later than the end of 2027".

The lawsuit has been filed with the US District Court in the Eastern District of Texas.