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In April 2023, Idaho National Laboratory (“INL”), a U.S. Department of Energy (“DOE”) National Laboratory, published a report entitled “Recommendations to Improve the Nuclear Regulatory Commission Reactor Licensing and Approval Processes” (the “Report”). The Report includes a number of useful and practical recommendations—informed by experiences and lessons-learned from prior licensing reviews—that could improve the efficiency of the Nuclear Regulatory Commission’s (“NRC”) review of new reactor applications. Interestingly, many of the Report recommendations would leave the NRC’s substantive technical and environmental reviews fairly unchanged—and instead focus on easing bottlenecks or delays in areas with little substantive impact on the NRC’s review of an application, while likely reducing licensing timelines and driving down licensing costs.
The Report was prepared by INL’s Stephen Burdick (Senior Counsel), John Wagner (Director), and Jess Gehin (Associate Laboratory Director for Nuclear Science & Technology). INL functions as the nation’s nuclear energy research, development, and demonstration laboratory providing and directing resources and capabilities to support nuclear energy, national security, and other applied energy missions. The Report is expected to be publicly available on the INL Research Library. However, as it is not yet posted, we have provided a detailed summary herein.
Background on the Report. According to the Report, “while acknowledging the important nuclear safety role provided by the NRC, it is apparent that one of the most significant time and resource intensive activities for developers of new nuclear systems, including advanced nuclear reactors, is the NRC licensing process.” Report at 1. The Report also notes that “the time and cost to obtain NRC licenses represent significant fractions of the total time and cost for new nuclear projects and may result in abandonment of projects or failure to even begin new projects. The challenge is particularly acute for advanced reactors which may raise unique or new regulatory questions and may be smaller in size, resulting in a much higher proportional impact from the time and costs associated with NRC licensing.” Id.
The good news, the Report continues, is that “reforms to the NRC licensing process have the potential to greatly increase efficiency and predictability and support the successful progress of new reactors.” Id. The Report recommendations are a set of independent or collective options for consideration, and if implemented, the Report notes, “the NRC can retain its world-class nuclear safety reputation while becoming a world leader for regulatory efficiency and a critical enabler to the clean energy transition.” Id.
Summary of the Report. Below is an overview of the recommendations for NRC reform contained in the Report.
A mandatory hearing is a non-contested proceeding in which only the applicant and the NRC Staff participate. The Commission is the presiding officer or delegates the responsibility to the NRC’s Atomic Safety and Licensing Board, an internal court within the NRC. The mandatory hearing process commences once the NRC staff completes its review of the application—i.e., issues the final Safety Evaluation Report or Environmental Impact Statement, whichever is later—and publishes a staff information paper (a so-called “SECY”) to the Commission describing its review. Past mandatory hearings have taken 4-7 months to complete, directly adding this delay to the licensing action. Report at 3-4.
As noted in the Report, the mandatory hearing is very time intensive for the NRC staff, as well as for the NRC Commissioners and applicants, but has little impact on the license under consideration—and, in fact, mandatory hearings have not resulted in any substantive changes to a project’s licensing review. Report at 4-5. This makes sense, as by the time of the mandatory hearing portion of the licensing review occurs, the application would have already been subjected to:
The Report further notes that the mandatory hearing does delay the issuance of a license under consideration by, on average, 6 months. Id. The Report recommends removing the AEA requirement for the NRC to hold an mandatory hearing—as they have little if any benefit and only serve to introduce substantial delay into a license issuance. Moreover, the Commissioners would still be able to conduct informational meetings during the NRC’s review of the application, would still provide guidance on novel legal and policy issues to the staff, and would still function in an adjudicatory capacity over contesting hearing matters. Report at 6.
Removing the ability to challenge NEPA issues in the contested hearing process would remove redundancy and minimize potential for delay during application reviews while retaining public participation opportunities. Report at 7. With the proposed change, the public would still have an opportunity to raise NEPA related concerns during the numerous opportunities for public participation under the NRC’s current NEPA implementation process and outside the contested hearing process, including through the courts. Id.
While the specific process for most hearings, including hearings on reactor applications, are called the “Simplified Hearing Procedures for NRC Adjudications” (set forth in 10 C.F.R. Part 2, Subpart L) they are anything but—as the Report outlines (and as we can confirm in practice). Report at 8. In fact, these regulations are more akin to a formal trial before a court, requiring formal pleadings, an extensive hearing file that must be continuously maintained and updated and privileged log (for privileged documents), oral arguments for pleadings and a hearing, which itself can last over several years based on the number of topics and complexity at issue, and subject to extensive rules of practice and procedure (somewhat akin to the Federal Rules of Civil Procedure), and place significant burden on all parties involved—the NRC staff, the applicant, and an intervenor participating in the contested hearing process. Hearings with multiple issues can take several years to complete, and can involve several rounds of evidentiary proceedings.
The Report recommends conducting the contested hearing under a legislative hearing process, which is already set out for certain proceedings in 10 C.F.R. Part 2, Subpart O. These hearings are intended to be simplified with less discovery, simpler paper filings, and a limited oral hearing. Report at 9. The Report further recommends that the mandatory disclosures be eliminated altogether, and that the NRC commence legislative hearings on topics during the NRC staff’s review rather than awaiting conclusion of the review. Id.
The Report recommends a slight modification to the statutory mission of the NRC to include a timeliness and efficiency focus. Id. This approach would be similar to the mission of other safety-focused agencies like the Federal Aviation Administration (“FAA”) and Food and Drug Administration (“FDA”). For example—
​​​​​While the Report notes that it is challenging to determine the specific cost and delay due to excessive ACRS meetings, as those meetings are intermingled with the NRC staff review, it nonetheless notes that the delays must be significant given the need to submit information to the ACRS, prepare for formal meetings with the ACRS, participate in those meetings, and address feedback from the ACRS. This process requires significant effort by both the NRC staff and the applicant, diverting those resources away from the Staff’s application review and the applicant’s support of that review. Id. at 12.
The Report recommends, among other things, that the relevant statutory language in the AEA should be revised to establish a new charter for the ACRS directing the appropriate scope and level of review for new reactor applications. This scope would instruct the ACRS to only review items the Commission refers to it and that the Commission should only refer safety topics which are new or unique and present a potential significant hazard. Id. at 12-13.
The NRC states the purpose of the policy statement is “to conduct business in an open manner, and to balance openness and transparency with the need to exercise regulatory and safety responsibilities without undue administrative burden.” Report at 13. However, as explained in the Report, the NRC provides limited exceptions to making interactions between NRC staff and applicants on substantive application topics subject to a public meeting. This prevents the free flow of information and requires the scheduling of public meetings—which require a minimum 10-day notice period before they can occur--to address topics which would be resolved in a brief conversation between the applicant and NRC staff. Id. Additionally, the current practices are also inconsistent with the current technology-driven and faster pace of communication in today’s society. Report at 14.
While the Report notes that the transparency of the NRC is to be commended, the use of these extensive and delayed public meetings is not the only means for transparency on these application topics—especially when members of the public have full disclosure of application documents, including all revisions to the application during the licensing review. They also have access to NRC Requests for Information, responses to those requests, other public meetings, etc. If needed, the NRC also could prepare summaries of communications held between only the NRC staff and the applicant and make those summaries publicly available through the NRC website. Report at 14.
The Report explains that Congressional direction to the NRC about more flexibility to engage with applicants outside of formal public meetings would greatly streamline this portion of the NRC Staff review. Id.
The Report explains that recent experience with NEPA reviews for small reactors at INL has shown very low potential environmental impacts for these projects, citing the June 2021 DOE Environmental Assessment for the Microreactor Applications Research, Validation, and Evaluation (MARVEL) 100-kilowatt thermal microreactor. Id. Another example is the February 2022, DOE and Department of Defense Strategic Capabilities Office issuance of an Environment Impact Statement for Project Pele to construct and demonstrate a prototype mobile microreactor. As reviewed, Project Pele would be capable of producing 1 to 5-megawatts electric and would be a small, advanced gas-cooled reactor using high-assay low-enriched uranium tristructural isotropic (“TRISO”) fuel and air as the ultimate heat sink. Report at 15. Following the environmental review, the agencies concluded: “The impacts of Project Pele activities . . . would be a small fraction of the impacts of current operations . . . and would be an even smaller fraction when the impacts from other reasonably foreseeable actions are considered . . . . Therefore, . . . the incremental impacts for all resource areas from Project Pele activities would be very small and would not substantially contribute to cumulative impacts.” Id. (citations omitted).
The Report provides that a threshold of 20 megawatts thermal is an appropriate cut-off for a small project as this should encompass projects intended for research, development, and demonstration and should ensure that the environmental impacts are kept small. Removing the NEPA requirements for these small projects on DOE sites or NRC licensing would significantly improve the ability to provide access to capabilities in a timely manner to support new nuclear development. Report at 15.
As one example, the AEA and NRC mission focus on whether activities provide a “reasonable assurance” of adequate protection of public health and safety. The reasonable assurance standard for licensing actions has been applied too rigidly, resulting in a standard of essentially perfection and zero risk, which has also resulted in excessively lengthy licensing reviews. Report at 16. Based on recent new reactor licensing experience, the NRC’s review standards must be finetuned further to allow for the more efficient review of new reactor applications. Report at 17.
According to the Report, one option to support this refinement is to establish a team of experts on the NRC review process without any responsibilities for a particular licensing review to shadow the review process and identify process improvements. Id. To ensure a sufficient level of independence, the review team should be composed of outside experts rather than internal NRC employees. This independent assessment team could then provide reports to Congress and identify improvements by the NRC. This review should be performed in parallel with other changes discussed herein, so the time for the review does not hold up other improvements. Report at 17. Further, this review must ensure that the reasonable assurance standard is further clarified to account for an acceptable level of risk and to ensure that NRC decision-making is risk-informed. Id.
Further, the above milestones do not represent the total licensing timeframe between submittal of an application until the licensing action is final. In other words, these milestones only represent the time period between acceptance, or “docketing,” of an application and issuance of a final safety evaluation. That docketing typically will take a month or two, but can take many months if the NRC seeks additional information. Report at 19. Therefore, a risk exists that the clock for the above milestones will not start for months after an application is submitted to the NRC, and there is a risk that portions of the NRC review will drift to the docketing timeframe to ensure the NRC can meet the established milestones. Id. Although this may help from a reporting standpoint, it does not help reduce the overall licensing timeframe for a new reactor project. This docketing risk could be prevented by limiting the time for the NRC to docket an application, adding a statutory requirement for docketing new applications, or requiring reporting to Congress if certain docketing timeframes are exceeded. Id.
While the first line of distinction is clear, the Report notes that the second part of the exception has presented some confusion due to the lack of definition of “demonstrating the suitability for commercial application.” Report at 21. For example, the Report notes that it could be argued that any demonstration project involving a private company has a “commercial application.” Conversely, prior to demonstrating suitability for commercial application, the project can also serve an R&D purpose. This confusion, the Report notes, has the potential to cause delays and may prohibit projects given the potential regulatory conflicts for individual facilities having both NRC licensed and DOE authorized projects. Id. Accordingly, the Report recommends that projects constructed and operated at a national laboratory site and which do not sell commercial power or any other commercial product (e.g., heat, hydrogen) should be allowed to proceed under DOE authorization rather than NRC licensing, and the AEA could be clarified to reflect this change. As the Report notes, “[t]here is no incentive for a private company to pursue a project at a national laboratory site without selling power or another commercial product, unless the project is needed for an R&D purpose.” Id. at 21.
Reforms to provide financial benefits to new reactor projects.​​​​​​​
Modify the NRC fee structure for the licensing of new reactors or otherwise provide financial support for those projects. The NRC charges applicants per hour/per person for applicants reviews, and application review fees are very high. The NRC is required by law to recover approximately 90% of its annual budget, which the NRC recovers through annual fees and hourly fees, and overall cost for preparing an application and supporting the NRC review of that application would be much higher. Report at 22. Any mechanism which would provide financial support to new reactor applicants would benefit the advancement of new nuclear projects. However, any changes should ensure that the costs are not shifted to existing licensees. Id.
The Report provides a number of options for addressing NRC review fees, including the following (1) not requiring the NRC to recover costs for new reactor application reviews; (2) removing fee requirements for certain types of applications (e.g., an Early Site Permit at a DOE site); (3) Congress covers the costs of certain applications; (4) the NRC could exclude fees for pre-application activities; (5) the NRC could provide fixed fees for reviews, based on the type of application and the size and type of reactor, (6) the NRC could provide a payback strategy based on a reactor subject to an application review entering operation; or (7) Congress directly appropriate funds to cover the licensing costs associated with projects that it encourages for the national good, such as advanced reactor demonstration projects that are fully or partially funded by appropriations to DOE. Report at 22-23.
This provision was written at a time when reactor technology was tightly restricted and before the Committee on Foreign Investment in the United States (“CFIUS”) was established to review national security implications from certain types of investments, including foreign investments in nuclear projects. The FOCD provision has long been an unnecessary impediment to investment in U.S. nuclear projects, had led to significant litigation before the NRC, including the termination of one late-stage reactor application, and the NRC application of the restriction creates significant confusion and uncertainty.
Author Amy Roma has spoken extensively in support of elimination of this provision, including in a paper published by the Nuclear Innovation Alliance, titled “U.S. Nuclear Innovation in a Global Economy: Updating an Outdated National Security Framework,” available here, and in testimony before the Senate Energy and Public Works Committee, available here. Among other reasons, we have argued the provision is no longer needed given the establishment of CFIUS and due to the fact that the NRC still has the ability to decline to issue a license if it determines doing so would be inimical to the public health and safety or common defense and security of the United States—the so-called NRC “inimicality review”--especially when considered in light of the significant negative impact FOCD has had on licensees, applications, and potential investors. Others have advocated for this change as well, including in a paper authored by Dr. Matthew Bowen, “U.S. Nuclear: Change the Laws That Constrain Foreign and Domestic Investment,” and a number of former NRC Commissioners have also written a letter to Congress recommending the elimination of the FOCD provision. The Report authors echo these statements in advocating for changes to the FOCD provision.
A bill was introduced in April 2023, called the ADVANCE Act (which we previously wrote about here), which proposes to narrow down the FOCD restriction to exclude key U.S. allies. However, the Report notes that the list countries contained in the ADVANCE Act is quite narrow, and that perhaps the list could be flipped, broadened, or deleted entirely. Report at 23.
​​​​​​​We will update this post to include the link when it is posted on the INL website. In the meantime, please reach out to the authors if you would like us to email you a PDF version of the Report. For more information please contact Amy Roma, Partner, or Stephanie Fishman, Associate.