The Nuclear Regulatory Commission has been accused in a new lawsuit of hindering the nuclear energy industry, particularly smaller reactors, by imposing extensive time and cost licensing requirements.
Texas, Utah, and the small modular reactor developer Last Energy Inc. filed a lawsuit against the federal regulatory agency on Monday, claiming it has exceeded authority.
While nuclear reactor projects have long been subject to risk analysis and licensing requirements, the plaintiffs have argued that the NRC does not have the legal authority to impose sweeping regulations on all types of facilities.
The lawsuit comes as large tech companies such as Amazon have announced major investments for SMR development in an effort to support the grid and their own artificial intelligence advancements.
If the court rules in favor of the states, it would likely pave the way for an accelerated timeline for new SMR construction and deployment.
Their argument centers on the Atomic Energy Act enacted in 1954. The plaintiffs argue that the NRC has operated on an “erroneous and complete unexplained interpretation” of this law, which authorizes the agency to require construction and operating licenses for reactors it deems to use nuclear material in quantities that are significant to national defense and security or use nuclear material in such a way that would affect public health and safety.
The plaintiffs claim that the AEA was issued to narrow down federal authority first granted in the 1946 McMahon Act. At that time, the McMahon Act allowed federal regulators to impose regulations on all nuclear facilities.
The plaintiffs argued that because the law specifies thresholds related to national security and public health, smaller reactors, including SMRs, do not fall under the NRC’s jurisdiction.
Compared to larger nuclear facilities, SMRs traditionally have a smaller physical footprint, allowing the reactors to be built closer to local grids. The small facilities also historically take less time to build, allowing the reactors to come online and supply energy sooner. At the moment, no SMRs are operational in the U.S., and only three are operational in the world. Typically, these reactors generate upward of 300 megawatts of power.
The plaintiffs insisted that technological advancements have made SMRs much safer than their traditional large counterparts and that it is absurd that the agency has imposed regulations meant for traditional reactors on new SMR technologies, even microreactor projects that are not even strong enough to power an LED lightbulb.
Even in a worst-case scenario, such as a meltdown, the plaintiffs argued that SMRs developed by Last Energy would ultimately release around 0.01 milli-Sievert of radiation. By comparison, according to the lawsuit, the average amount of radiation a person is exposed to during an abdomen CT scan is around 8 milli-Sievert.
The plaintiffs said the regulations impose “crippling” costs on SMR developers, reaching as high as $500 million for steps including design certification. The complaint claimed Last Energy was forced to abandon an SMR project in Texas over these extreme costs and is now taking its investments abroad.
“These costs ensure that SMR producers cannot develop a prototype, collect empirical data on the prototype’s performance in the real world, and then iterate their models several times to perfect their performance over years,” the lawsuit reads.
The plaintiffs claim that by imposing the same regulators applied to large nuclear facilities on SMRs, the regulations have caused injuries to residents in Texas and Utah as energy demand soars and strain on local grids grows.
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“These requirements threaten the health and prosperity of Texans by hindering the rollout of safe and reliable power—precisely the sort of thing that Last Energy could provide,” the plaintiffs said of the energy company’s SMR projects.
The lawsuit is specifically seeking a vacatur of the NRC’s Utilization Facility Rule that guides its licensing requirements.