November 14, 2018

Preparing for Advanced Reactors: Exploring Regulatory and Licensing Reform

Maxine Segarnick and Sachin Desai

The views expressed herein are those of M. Segarnick and S. Desai as individuals, and do not represent the views of the U.S. Nuclear Regulatory Commission, the law firm Hogan Lovells US LLP, or any other person or organization. 


The road to licensing advanced reactors in the United States raises the question of regulatory reform, as well as the potential for updates to the licensing process itself. These changes may be essential to account for the design differences between advanced reactors and the current operating fleet of nuclear power plants, which can greatly improve safety but potentially challenge the current regulatory framework. This article reflects on the progress of several recent advanced reactor-related US Nuclear Regulatory Commission (NRC) publications and poses a fresh look at whether the NRC’s adjudicatory process can be used to further pave the road to licensing advanced reactors in the United States. 

New Paths to Regulatory Reform

In the past year, the NRC has taken significant steps to prepare for licensing non-light water reactors (non-LWRs, also called “advanced” reactors) These steps factor into the NRC’s transformation initiative and are part of the regulatory reform effort that may prove necessary to update the agency’s reactor licensing process in consideration of advanced reactor technologies. In the words of Victor McCree, former NRC Executive Director for Operations, “[t]he nuclear industry has indicated plans to introduce new and novel technologies . . . Because the use of such new nuclear technologies would challenge our current regulatory framework, we must not only innovate, but also identify and implement transformative change.” Memorandum from Victor M. McCree, Executive Director for Operations, U.S. NRC, to Transformation Team, U.S. NRC, “Formation of NRC Transformation Team” (Jan. 25, 2018) (Agencywide Documents Access and Management System (ADAMS) Accession No. ML18029A106).

Last year’s ABA SEER Nuclear Law Committee article discussed the NRC’s steps toward licensing readiness for non-LWRs, including the publication of regulatory guides and other rulemaking-related documents related to licensing advanced reactors. See Maxine Segarnick, NRC Readiness Strategy for Non-LWR Licensing Reviews, ABA SEER Nuclear L. Comm. Newsl., vol. 9, no. 2 (2017). As described in the 2017 committee newsletter, the framework of the NRC’s readiness strategy is captured in the NRC document, NRC Vision and Strategy: Safely Achieving Effective and Efficient Non-Light Water Reactor Mission Readiness, (ADAMS Accession No. ML16356A670), which set forth two phases: first, conceptual planning, which the NRC completed in December 2016, and second, detailed work planning efforts and task execution, which are ongoing. See ADAMS Accession No. ML17165A069. While the NRC has made progress in this area in the past year, significant work remains before non-LWRs will benefit from a licensing framework that fully accounts for the unique properties of new technologies. Certain steps to achieve this goal are outlined, in part, in the NRC’s two July 2017 publications: Non-Light Water Reactor Near-Term Implementation Action Plans (ADAMS Accession No. ML17165A069), and Mid-Term and Long-Term Implementation Action Plans (ADAMS Accession No. ML17164A173).

As part of these steps, in December 2017, the NRC published its Regulatory Review Roadmap for Non-Light Water Reactors (ADAMS Accession No. ML17312B567). This document provides advanced reactor designers with an overview of the various pathways for the NRC’s review of new advanced reactor designs, in order to help the designer select the best option for the design. This document is part of the NRC’s “near-term implementation action plan,” the development and execution of which constitute Phase 2 of the NRC’s vision and strategy for achieving non-LWR readiness. Progress on the implementation of these plans is reported annually. See FY2017 report at ADAMS Accession No. ML17319A550, last revised December 7, 2017.

Another noteworthy milestone achieved in this context is the April 2018 publication of the final version of Regulatory Guide (RG) 1.232, Guidance for Developing Principal Design Criteria for Non-Light Water Reactors (ADAMS Accession No. ML17325A611). This RG provides guidance on how designers, applicants, and licensees may develop principal design criteria (PDC) for non-LWR designs, as required by applicable NRC regulations. This is important because the general design criteria (GDC) establish the minimum requirements for the PDC for LWRs, but the GDC are intended only as guidance in establishing PDCs for non-LWRs. 10 C.F.R. pt. 50, app. A. The RG also provides a summary and crosswalk between the LWR GDC and the NRC staff’s determination of their applicability to two specific advanced reactor designs, sodium-cooled fast reactors and modular high-temperature gas-cooled reactors.

While the development of these guidance documents (e.g., the Regulatory Review Roadmap, and RG 1.232) is undoubtedly useful for advanced reactor developers and applicants, the potential for significant change is limited by the fact that the scope of the NRC’s advanced reactor regulatory reform efforts is mostly bounded by existing regulations. See Non-Light Water Reactor Near-Term Implementation Action Plans (ADAMS Accession No. ML17165A069), and Mid-Term and Long-Term Implementation Action Plans (ADAMS Accession No. ML17164A173) (which contemplate development of a non-LWR regulatory review process “within bounds of existing regulations”). Rather than regulate through case-by-case exemptions from the existing regulations, it is worth asking whether the agency should instead address advanced reactor regulatory reform through a single rulemaking effort at the scale of the 1989 issuance of 10 C.F.R. Part 52.

To that end, the NRC staff recently requested that the Commission support a new rule for licensing non-LWRs. Specifically, on May 23, 2018, the NRC staff submitted a paper to the Commission recommending, among other things, the development of a new rule for reviewing the design and operation of advanced reactors. Achieving Modern Risk-Informed Regulation, Commission Paper SECY-18-0060 (May 23, 2018) (ADAMS Accession No. ML18110A186). This new rule would provide for an “optional, technology-inclusive, risk-informed, performance-based rule for reviewing the design and operation of advanced reactors.” While the NRC staff proposed that the rulemaking initially be “limited to the design and operating criteria for licensing a non-LWR,” the NRC staff stated that it “would consider whether it should include alternate licensing process(es) based on lessons learned from applying 10 CFR Part 52.” SECY-18-0060, enclosure 5, at 10 (ADAMS Accession No. ML18110A403). The paper indicates that the rule would focus on the most safety significant aspects of new reactor design and could eliminate the need for regulating through exemption under 10 C.F.R. Parts 50 and 52. SECY-18-0060, enclosure 5, at 11. If the Commission approves the rulemaking activity, the staff will initiate a rulemaking plan. And, as NRC staff suggests, this new development could potentially become a new part of the NRC regulatory framework—a “10 CFR Part 53.”

Exploring Potential Incorporation of an NRC Adjudicatory Process to Aid in Advanced Reactor Licensing

The Atomic Energy Act’s (AEA) hearing requirement is designed to promote a policy of transparency and rigor in agency decision-making. In this regard, Section 189 of the AEA permits virtually any affected party the right to seek a public adjudicatory hearing on any new permit application for a nuclear power plant. 42 U.S.C. 2239(a)(1)(A). It also requires a mandatory hearing before any construction permit or combined license for the same. The hearing process provides applicants, the public, and the NRC’s own staff an opportunity to make their safety cases before an independent adjudicatory body as to whether a design or facility provides for “reasonable assurance of adequate protection of the public health and safety.” Id. § 2239(a)(1)(B). Hearings are generally first held before three-judge panels from the Atomic Safety & Licensing Board Panel (ASLBP), which is the NRC’s independent administrative adjudicatory body, and then reviewed on petition or appeal by the NRC Commission.

The NRC’s hearing process brings with it a number of benefits that may not always be fully recognized. First, the ASLBP is one of the few adjudicatory bodies in the country, if not the only one, which pairs scientists and lawyers together to tackle the complex issues before the agency. 42 U.S.C. § 2241. Courts recognize that the NRC operates “at the frontiers of science,” and the AEA therefore sets forth a unique process to address that challenge. Baltimore Gas & Elec. Co. v. Nat. Res. Def. Council, Inc., 462 U.S. 87, 103 (1983). Second, the NRC adjudicatory process creates some degree of finality. A licensing board must reach a binding decision as to “adequate protection,” which then can be appealed directly to the NRC Commission for a final determination (before going on to the federal courts, if the final decision is challenged). Third, the ASLBP is flexible. It is designed to handle all types of cases, from new plant licensing to license renewals to spent fuel management. The ASLBP has a core of administrative judges that are specialists in many different technical and legal areas.

The structure of the NRC’s adjudicatory process and the diverse pool of expert administrative judges make the NRC’s process well suited to advanced reactor licensing, which requires (1) flexible insight into novel technical issues, (2) the ability to map these novel issues to a complex regulatory framework mixing both legal and technical analyses; and (3) the ability to make binding decisions that applicants and potential investors can rely on.

In the past, public interest organizations have comprised the majority of parties requesting a hearing on NRC licensing actions. Often, these groups raise contentions when a power reactor seeks a new, renewed, or amended license, and they assert that the applicant’s approach (and the NRC staff’s assessment of that approach) does not provide for “adequate protection.” 42 U.S.C. § 2322. The regulatory framework implementing the Atomic Energy Act’s hearing provision largely presumes that if someone seeks a hearing on a license proceeding, that person plans to assert that the application is in some manner deficient by failing to meet a safety or environmental requirement. See 10 C.F.R. § 2.309(a), (f) (requiring those who want to seek a hearing on a licensing action file “contentions” that must identify a deficiency or error in the license application); see also, e.g., In the Matter of Private Fuel Storage, LLC (Indep. Spent Fuel Storage Installation), LBP-98-7, 47 NRC 142, 180 (Apr. 22, 1998) (one example of many in which a licensing board or the NRC Commission essentially presumed that contentions must raise a safety or environmental deficiency).

However, the hearing process has potential to be useful for NRC license applicants as well. In a 2014 decision, Nuclear Innovation N. Am. LLC (S. Texas Project, Units 3 & 4), LBP-14-3, 79 NRC 267 (Apr. 10, 2014), an NRC licensing board decided a disagreement between the NRC staff and the applicant (there was an outside intervenor group, but it was essentially secondary to the dispute). The dispute concerned foreign control of a nuclear power plant, and whether the applicant’s approach to managing foreign ownership complied with the requirements of the AEA. The NRC staff thought the applicant’s approach did not comply with statutory and regulatory requirements, to which the applicant disagreed. The licensing board determined that the applicant’s plan did comply, and the Commission thereafter upheld the decision on review. See id.; CLI-15-7, 81 NRC 481, 499 (2015).

The question is then: as part of the NRC’s ongoing regulatory reform initiative and NRC staff’s recently recommended rulemaking, is there an opportunity to use the AEA’s hearing process to provide applicants an additional route to make their safety case to the NRC? It is possible such a regime could offer benefits both to applicants and the NRC staff seeking resolution on intractable issues that could otherwise delay licensing or even the certification of new designs. Could it also alleviate fears that the NRC’s regulatory regime is too crystalized around LWRs?

While adjudicating an entire license application would likely be impractical, there may be disagreements between an applicant and NRC staff on discrete core issues of safety—i.e., whether a certain emergency core cooling system philosophy provides “adequate protection,” or if a certain regulation or NRC guidance should apply to the advanced reactor design at issue. In such cases the ASLBP (or a new hearing body) could set forth a tailored, precedential, decision on that particular disagreement within a reasonable timeline (e.g., six months to a year after petition by an applicant, staff member, or intervenor), either after NRC staff’s review of the application is complete or earlier if the parties prefer. These decisions could thereafter be reviewed by the Commission on a similar timetable.

Given the broad hearing language set forth in the AEA, such a process can likely be stood up through regulatory changes. These changes could set forth an additional process to resolve technical issues in reactor licensing, while preserving the existing 10 C.F.R. Part 2 process for challenges to the license application. This is not to say it would be easy—a 10 C.F.R. Part 2 regulatory reform initiative would likely have to be undertaken as a separate process from the risk-informed 10 C.F.R. Part 53 rulemaking initiative currently contemplated. But, as it would be tackling a related issue, there may be opportunities for synergies so as to not double the overall effort. Significant work would need to be done to integrate a revised hearing approach into the NRC’s licensing framework, such that it ends up an efficient use of agency and public resources. Nonetheless, this may be the right time to evaluate such revisions, considering that a 10 C.F.R. Part 53 initiative would also be looking broadly at how to more effectively use agency and public resources in the permitting of next-generation nuclear reactors. In sum, it is a reform idea worth considering.

    Maxine Segarnick and Sachin Desai

    Published: November 14, 2018

    Maxine Segarnick is an attorney in the Office of the General Counsel at the U.S. Nuclear Regulatory Commission. Sachin Desai is a Senior Associate at the law firm of Hogan Lovells US LLP.

    The views expressed herein are those of M. Segarnick and S. Desai as individuals, and do not represent the views of the U.S. Nuclear Regulatory Commission, the law firm Hogan Lovells US LLP, or any other person or organization.