B. Developments in Nuclear Regulatory Commission Membership
The Commission has not returned to a full complement following the expiration of Commissioner Jeffery Baran’s term in June 2023. President Biden nominated Commissioner Baran for another term but, after the Senate failed to act on his nomination in 2023, the President did not renew Baran’s nomination. President Biden has not put forth a new nominee for the vacant seat as of this reporting date. Chair Christopher Hanson has been reappointed for a second term ending June 2029.
C. Federal Legislation
1. Prohibiting Russian Uranium Imports Act
In May 2024, President Biden signed H.R. 1042, Prohibiting Russian Uranium Imports Act. The Act prohibits the importation of unirradiated, low-enriched uranium (LEU) produced in Russia absent a waiver from the Secretary of Energy, subject to an aggregate cap on the total amount of Russian LEU imported to the United States through 2027. As of this reporting date, the Department of Energy (DOE) has issued preliminary guidance for utilities seeking waivers from the ban. Centrus Energy and certain U.S. utilities have publicly stated that they intend to seek a waiver.
2. Nuclear Fuel Security Act of 2023
In December 2023, President Biden signed the National Defense Authorization Act for Fiscal Year 2024 (NDAA 2024) (H.R. 2670), which included provisions from the Nuclear Fuel Security Act of 2023 (S. 452) introduced by Sen. Joe Manchin (D-WV) earlier that year. The Act seeks to increase domestic supply of certain types of LEU by requiring the DOE to create a program to increase the quantity of LEU and high-assay low-enriched uranium (HALEU) produced by U.S. companies. Domestic HALEU supply is seen as critical to the long-term success of certain next-gen designs. DOE’s programs are meant to prime the pump for U.S. HALEU production capacity until enough demand emerges as next-gen projects are completed in the coming decades.
3. Accelerating Deployment of Versatile, Advanced Nuclear for Clean Energy Act of 2023 (ADVANCE Act)
In July 2024 President Biden signed the Accelerating Deployment of Versatile, Advanced Nuclear for Clean Energy Act of 2023. The Act established a joint initiative between the U.S. Department of Commerce and DOE to facilitate outreach to nations seeking to develop advanced nuclear energy programs. The Act also aims to reduce regulatory costs associated with licensing advanced nuclear reactor technologies and requires the NRC to assess the timeliness of its licensing efforts. The Act provides the NRC with hiring authority to better enable the agency to hire and retain highly specialized staff to work on advanced reactor licensing. It also requires the NRC to update the agency’s mission statement to reflect modern beneficial uses of nuclear energy.
4. Other Legislative Action
The Further Consolidated Appropriations Act, 2024 (H.R. 2882) extended the Price-Anderson Act nuclear indemnification policy for forty years, from 2025 to 2065. Under the law, the primary insurance coverage for each nuclear reactor continues to be tied to inflation (as determined by the NRC), and the Act increased the liability coverage for nuclear incidents occurring outside of the United States involving DOE contractors from $500 million to $2 billion.
The Spent Nuclear Fuel Prioritization Act of 2023 (H.R. 3862) would amend the Nuclear Waste Policy Act of 1982 (NWPA) to prioritize the acceptance of spent nuclear fuel from decommissioned or decommissioning reactors that are located in an area with the largest population and that are subject to the highest hazard of an earthquake. H.R. 3862 has been referred to the House Committee on Energy and Commerce and subsequently to the Subcommittee on Environment, Manufacturing, & Critical Materials.
The Civil Nuclear Exports Act of 2023 (S. 1928) would modify the Export-Import Bank Act of 1945 to modify the prohibition on financing in the Export-Import Bank Act by specifying the financing of civil nuclear facilities, materials, and technologies that support the nuclear energy sector. The bill has been referred to the Committee on Banking, Housing, and Urban Affairs.
The NRC Office of Public Engagement and Participation Act of 2023 (H.R. 4530) would establish a new NRC office to support public participation in proceedings before the NRC, similar to Section 319 of the Federal Power Act and several state public utilities commission laws that provide financial and technical assistance to members of the public seeking to participate in these matters. H.R. 4530 has been referred to the House Energy and Commerce Committee.
The Nuclear Red Tape Reduction Act (H.R. 4676) is intended to direct the NRC to further use risk-informed and performance-based approaches to licensing and streamline the adjudicatory hearing process. H.R. 4676 has been referred to the House Energy and Commerce Committee.
D. Judicial
1. Challenges to CISF
Although the DOE used-fuel management program has been largely inactive, private companies launched two private away-from-reactor consolidated interim storage facilities (CISFs). In 2021, Interim Storage Partners, LLC (ISP), a joint venture between Waste Control Specialists LLC and Orano USA LLC received from the NRC a license under 10 C.F.R. part 72 for its CISF in Texas. In May 2023, the NRC issued a final license for Holtec’s New Mexico CISF. Both projects have faced legal challenges, the most notable of which are summarized below.
2. State of Texas v. NRC
On August 25, 2023, a Fifth Circuit panel issued an opinion vacating ISP’s NRC license in response to challenges from the State of Texas and Fasken Land and Minerals, Ltd. (Fasken). The panel unanimously ruled that the Atomic Energy Act of 1954, as amended (AEA) did not give the NRC authority to issue a license to private parties for away-from-reactor spent fuel storage. According to the panel, the NWPA is “a comprehensive statutory scheme for dealing with nuclear waste generated from commercial nuclear power generation, thereby foreclosing the Commission’s claim of authority.” The panel also determined that the NRC’s exercise of authority over away-from-reactor spent fuel storage was invalid under the major questions doctrine articulated in West Virginia v. EPA. Also notably, the court concluded that Texas is entitled to challenge the NRC’s license for ISP even though it failed to participate in the Atomic Safety and Licensing Board hearing before the NRC. The court recognized an exception to the Hobbs Act party-aggrieved status requirement where “a person may appeal an agency action even if not a party to the original agency proceeding” when “the agency action is attacked as exceeding [its] power.” The panel’s decision to recognize an exception to the Hobbs Act requirement and its rejection of the NRC’s interpretation of its powers under the AEA are both notably inconsistent with rulings from several other federal courts of appeals, creating a circuit split on both topics. In a 9–7 vote, the Fifth Circuit denied the petitions for rehearing en banc. In June 2024, the federal government and ISP filed petitions for certiorari with the U.S. Supreme Court.
3. Beyond Nuclear vs. NRC
After Holtec received its final license in May 2023, several petitioners filed briefs before the D.C. Circuit alleging that the NRC violated the NWPA and the Administrative Procedure Act when it refused to terminate the licensing proceeding or deny Holtec’s CISF application. Additionally, Sierra Club and six other nonprofits filed a third brief raising numerous factual contentions and pushing the Fifth Circuit’s analysis in Texas v. NRC that the NRC lacked statutory authority to issue a license for away-from-reactor spent fuel storage facilities. The federal government and Holtec responded to the above petitioner briefs, and Nuclear Energy Institute (NEI) has filed an amicus brief in support of the NRC. The briefing was completed in January 2024 and oral argument was held on March 5, 2024, before Judges Rao, Walker, and Garcia. The D.C. Circuit is expected to issue its opinion within the coming months.
4. Fasken Land and Minerals, Ltd. v. NRC
Fasken filed a petition for review in the Fifth Circuit challenging the NRC’s issuance of a license to Holtec. NRC, Holtec, and NEI as amicus responded in similar fashion to the arguments raised in the parallel Fifth Circuit case challenging ISP’s license. In March 2024, after the Fifth Circuit issued its opinion in Texas v. NRC vacating ISP’s license, a Fifth Circuit panel published a two-page order vacating Holtec’s license. The decision essentially applied Texas v. NRC to reach the same result. In June 2024, the federal government and Holtec filed petitions for certiorari with the U.S. Supreme Court.
5. Notable Spent Fuel Damages Decisions
Litigation continues on spent fuel damages claims against the DOE for its partial breach of the Standard Contract. Two notable legal positions came out of the Court of Federal Claims in the last year:
In Connecticut Yankee Atomic Power Co. v. United States, 169 Fed. Cl. 531 (2024), the court found that investment earnings on the Nuclear Decommissioning Trusts should not be used to offset the calculation of damages from DOE’s partial breach.
In Georgia Power Co. v. United States, 166 Fed. Cl. 621 (2023), the court found that the government was entitled to an offset against the plaintiffs’ damages when the plaintiffs received a financial benefit as a consequence of the breach from returns on shareholder investments in infrastructure (like dry storage).
E. Regulatory and Licensing
1. Decommissioning
On March 3, 2022, the NRC published in the Federal Register a Notice of Proposed Rulemaking regarding a proposed rule for operating reactors transitioning to decommissioning. The NRC received over 4,000 comments on the proposed rulemaking in addition to holding periodic public meetings on the proposal. NRC sent a final rule package to the Commission for approval in January 2024, with a final rule expected to be published sometime in 2024. The details of the decommissioning rulemaking, which has been underway for nearly a decade, have been addressed in prior reports.
2. Part 53, Risk-Informed, Technology-Inclusive Regulatory Framework for Advanced Reactors
In March 2024, the Commission provided feedback to NRC staff on the draft Part 53 proposed rule staff sent to the Commission in March 2023. The Commissioners directed staff to revise portions of the draft proposed rule and return it to the Commission by September 2024. Assuming the Commission is satisfied with staff’s revisions, NRC would likely publish the proposed rule in the Federal Register in late 2024. Given the size of the rule and expected extent of stakeholder comments, it is unlikely that a final rule would be published earlier than 2026. In the meantime, several advanced nuclear and small modular reactor projects are proceeding with early development activities under the assumption that they will be licensed under Part 50.
3. Licensing Activity for Next-Gen Projects
During the reporting period, several small modular and advanced reactor projects have ramped up NRC licensing activity, most notably with the submittal and docketing of the first construction permit application for a commercial-scale project using a new reactor design. Nuclear vendors have been in pre-submittal discussions with NRC staff for years, including submission of topical reports, test reactor permits, and other licensing activity that is meant to pave the way for the licensing of the next generation of nuclear designs. In May 2024, NRC docketed TerraPower’s construction permit to build its 345 MW Natrium reactor in Wyoming. The Natrium project is the recipient of DOE’s Advanced Reactor Demonstration Program (ARDP) funding. Several other projects have submitted notices to NRC of their intent to file construction permit applications in the coming years, including the X-Energy and Dow project in Texas that is also supported by ARDP funding. It also bears noting that, during the reporting period, NuScale and Utah Associated Municipal Power Systems announced the cancellation of the Carbon Free Power Project following an apparent failure to obtain sufficient financial commitments to continue with project development and construction.
F. Notable Industry Developments
1. Palisades Restart
Holtec acquired the Palisades facility in Covert, Michigan, from Entergy in 2022, immediately after Entergy permanently defueled the reactor and filed the requisite certifications with NRC, at which point the Palisades operating license was converted to a possession-only license. Since its acquisition, Holtec has explored the possibility of reinstating the operating license, which originally authorized operations through 2031. In recent months, Palisades’s restart activities have become significantly more concrete. The restart represents the first attempt any licensee has made to reinstate an operating license after stepping down the license into decommissioning. Holtec has filed several license amendment and exemption requests, principally to unwind the licensing changes implemented at Palisades to reflect the transition to decommissioning and has participated in many public meetings with NRC staff to discuss the regulatory path to restart. NRC has previously declined to modify its regulations to provide a pre-defined pathway to reinstating an operational licensing basis on the view that the existing process (namely, the ability to submit exemption requests and license amendment requests) affords sufficient flexibility to enable licensees to do so.
On March 27, 2024, DOE announced conditional commitment of a $1.5 billion loan guarantee to Holtec to restart Palisades. If completed, the loan guarantee would be the first issued under Section 1706 of Title XVII of the Energy Policy Act of 2005, which was created by the Inflation Reduction Act to expand DOE’s Title XVII authority to recommissioning projects like Palisades. The Michigan legislature has also appropriated funds to support the restart, and Holtec announced that it has obtained offtake agreements with two local power cooperatives.
2. Subsequent License Renewal
As previously reported, in 2022 the Commission directed the staff to initiate a rulemaking regarding the environmental impacts specifically of subsequent license renewal (SLR). The NRC staff did so, publishing a proposed rule concerning those impacts as well as an updated draft license renewal (LR) generic environmental impact statements (GEIS) that included the SLR impacts in the Federal Register on March 3, 2023. The proposed rule redefined the number and scope of environmental issues addressed by the NRC and license renewal applications. After a public comment period, the staff submitted a draft final rule and draft final GEIS to the Commission on February 21, 2024. The Commission approved the staff’s proposal without significant changes on May 16, 2024. In its approval, the Commission noted that the next ten-year review cycle for the LR GEIS would be due in 2031, with an effective date of 2034. The Commission directed the staff to “continue to engage regularly with industry stakeholders to determine interest in a third term of license renewal” and provide a rulemaking plan to the Commission accounting for the need for a GEIS for a third LR term if the staff is informed of such an intent prior to 2034. Publication of the final rule and LR GEIS is imminent.
3. Vogtle Units 3 and 4
Vogtle Unit 4 achieved commercial operation in April 2024. The new Vogtle units are the only large light-water reactors completed following the wave of new projects in the wake of the Energy Policy Act of 2005. The project navigated a global recession, a global pandemic, bankruptcy of its prime contractor, and the first pass through NRC’s Part 52 licensing process. Following completion of Unit 4, Plant Vogtle is the largest generator of carbon-free energy in the United States.
The Committee gratefully acknowledges the contributions of Jerry Bonanno, Deputy General Counsel, Jonathan Rund, Deputy General Counsel and Assistant Secretary, and Kaitlin Rekola, Senior Staff Counsel, at the Nuclear Energy Institute; Anne Leidich, Partner, and Elorm Sallah, Associate, at Pillsbury Winthrop Shaw Pittman LLP; and Alan Lovett, Partner, and Lisa Ezell, Paralegal, at Balch & Bingham LLP.