The Nuclear Regulatory Commission (NRC) staff recently published its views on the applicability of a 1987 policy statement to the holders of combined licenses (COLs) who defer or terminate the construction of new reactor projects.

During construction of nuclear power plants licensed by the NRC, plant owners occasionally decide to either postpone or stop construction. In late 1987, the Commission issued its Policy Statement on Deferred Plants (52 Fed. Reg. 38,077) to address the procedures that apply to nuclear power plants under these circumstances, including “deferred plants,” which could reactivate construction, and “terminated plants,” which have announced that construction has been permanently stopped. The policy statement addresses topics such as maintenance, preservation, and documentation of equipment; the process for reactivating construction; and withdrawal of a construction permit.

The US Nuclear Regulatory Commission (NRC) Office of Investigations (OI) recently published its Office of Investigations Annual Report FY 2017, which provides an overview of OI’s activities during the past fiscal year.

Notably, the report reveals that the largest category of OI investigations continues to be discrimination cases. “Discrimination” in this context refers to retaliation for engaging in protected activities established in Section 211 of the Energy Reorganization Act of 1974, as amended. Of the 115 OI investigations opened in FY 2017, 41 (36%) were discrimination cases. Although the number and proportion of discrimination investigations have slightly decreased from FY 2016, during which 46 (39%) of the opened cases were discrimination cases, discrimination has remained the largest case category for the past two years.

On February 7—the same day that the US Nuclear Regulatory Commission (NRC) issued its updated Regulatory Analysis focused on making the decommissioning process more efficient and less costly—two pieces of legislation were reintroduced in the Senate that would have the opposite effect.

The Safe and Secure Decommissioning Act of 2018 (S. 2396), introduced by Senator Kamala Harris (D-Calif.) and cosponsored by Senators Edward Markey (D-Mass.), Bernie Sanders (D-Vt.) and Kirsten Gillibrand (D-NY), would prohibit the NRC from authorizing waivers or exceptions to emergency planning requirements until all fuel has been moved to dry storage containers. According to Senator Gillibrand, “Americans should know that safety is the most important priority at nuclear plants across the country, including at plants that are being decommissioned.” This legislation, however, appears to be aimed at directly countering the NRC’s current plan to pursue rulemaking to propose a graded approach to emergency planning that is commensurate with the reductions in radiological risk at the four stages (or levels) of decommissioning:

The US Nuclear Regulatory Commission (NRC) published a notice in the February 7 Federal Register of the availability of its new Regulatory Analysis for Regulatory Basis: Regulatory Improvements for Power Reactors Transitioning to Decommissioning. This update considers comments received on the preliminary draft regulatory analysis that was issued for public comment on May 9, 2017. At nearly 200 pages, the updated analysis presents the costs, benefits, and other economic impacts to industry, government, and society from the NRC staff recommendations considered in the regulatory basis. In the end, however, the staff maintains the course it set several years ago. And importantly, the staff continues to emphasize that it has not identified any safety or security concerns in the current regulatory framework for decommissioning power reactors, but notes that by revising its regulations to achieve a long-term regulatory framework for decommissioning, the NRC can reduce the filing and processing of individual licensing actions and make the decommissioning process less costly and more efficient and predictable. This continues to be an important goal, especially considering that most nuclear plants are being shut down primarily for economic reasons.

The key finding of the analysis is that there continues to be sufficient justification to proceed with rulemaking in the areas of Emergency Preparedness; Physical Security; Cyber Security; Fitness for Duty—Drug and Alcohol Testing; Minimum Staffing and Training Requirements for Non-Licensed Operators, Including Certified Fuel Handlers; Decommissioning Funding Assurance; Offsite and Onsite Financial Protection Requirements and Indemnity Agreements; and Application of the Backfit Rule. The focus on these areas is not surprising as they generally reflect current standard decommissioning practices—implemented now through time-consuming and costly individual licensing actions including amendments and exemptions.

At the recent NEI Nuclear Fuel Supply Forum, Morgan Lewis partner Giovanna M. Cinelli highlighted important changes to the Committee on Foreign Investment in the United States (CFIUS) transaction review process being considered by Congress that are likely to affect the Energy industry in general and the nuclear industry in particular. Giovanna is the leader of the Morgan Lewis International Trade, National Security & Economic Sanctions practice and has been practicing in that area of law for more than 25 years. Giovanna counsels clients in the defense, aerospace, and technology sectors on a broad range of issues affecting national security and export controls, including complex export compliance matters, audits, cross-border due diligence (including CFIUS), and export enforcement, both classified and unclassified.

CFIUS is an inter-agency committee authorized to review cross-border transactions that could result in ownership, control, or (in some instances) influence of a US business by a foreign person, in order to determine the effect of such transactions on the national security of the United States. In her presentation, Giovanna described some of the challenges parties have encountered with the CFIUS review process in light of the government’s recent focus on the national security implications of cross-border investments, including: a greater volume of requests for additional information; an increase in the number of days needed to complete a pre-filing review; and an increase in the number of filings that require a 75 calendar day review period.

The US Nuclear Regulatory Commission (NRC or Commission) issued a final rule on January 12 to amend its regulations to adjust, for inflation, the maximum Civil Monetary Penalties (CMPs) it can assess under statutes enforced by the Commission. See Final Rule, Adjustment of Civil Penalties for Inflation for Fiscal Year 2018, 83 Fed. Reg. 1515. The NRC revised 10 CFR § 2.205 (Civil penalties) to adjust the maximum CMP for a violation of the Atomic Energy Act (AEA), or any regulation or order issued under the AEA, from $285,057 to $290,875 per violation, per day (an increase of 2.041%). The Commission similarly amended provisions concerning program fraud in 10 CFR § 13.3 (Basis for civil penalties and assessments) to adjust the maximum CMP under the Program Fraud Civil Remedies Act from $10,957 to $11,181 per false claim or statement. Under the rule, the NRC may apply these increased CMP amounts to any penalties assessed by the agency after the effective date of the rule (January 15, 2018), regardless of whether the associated violations occurred before or after this date.

Section 234 of the AEA (42 USC § 2282) limits civil penalties for violations of the AEA to $100,000 per day, per violation. However, the Federal Civil Penalties Inflation Adjustment Act of 1990 (FCPIAA), as amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (2015 Improvements Act), requires the adjustment of CMPs for inflation in accordance with a statutory formula set forth in the legislation. The NRC previously had increased via rulemaking the maximum CMP amounts in 10 CFR §§ 2.205 and 13.3 on four occasions between 1996 and 2008. Notably, the 2015 Improvements Act requires that each agency continue to adjust CMP amounts on an annual basis, based on the percentage change between the Consumer Price Index (CPI) for the previous October and the CPI for October in the year preceding that.

The New York Times recently published an important article discussing the tightening supply and uncertain future of MO-99, a short-lived medical isotope widely used for medical diagnostics in the United States and worldwide. Currently, there are only six suppliers of MO-99 in the world, all of them government-owned nuclear research reactors located outside of the United States. As noted in the article, one US company—SHINE Medical Technologies—has plans to build a domestic supply chain in Wisconsin to ensure a reliable supply, shielded from potential interruptions that could readily impact a foreign-only supply chain. They have already received Nuclear Regulatory Commission (NRC) approval in the form of a Construction Permit issued in 2016 to begin work on the facility. There was no material opposition to the NRC permit for SHINE, perhaps in recognition of the importance of nuclear medicine in our day-to-day health and well-being. A few other companies are also seeking to build MO-99 domestic production facilities. While nothing is ever easy in the nuclear world and we cannot predict who will get to the finish line first, it seems that the successful addition of a domestic supply of MO-99 is an important first step towards “health independence.” And much like the current focus on US energy independence, it seems equally worthy of national attention.

Read the article here.

The Nuclear Regulatory Commission (NRC) staff recently agreed with NuScale Power’s proposal for the NuScale small modular reactor to eliminate the use of Class 1E electrical systems as part of its reactor design certification process. Class 1E is a safety classification used at all currently-operating commercial nuclear power reactors for electrical equipment and systems that are essential to emergency reactor shutdown, containment isolation, reactor core cooling, and containment and reactor heat removal. The NRC staff’s first-of-a-kind approval recognizes the inherent passive safety features and designs of an advanced reactor, which should result in attendant benefits in the ease of procurement, construction, and operation of the relevant systems. Although the NRC staff’s approval is currently limited to the NuScale design, this approval is significant as it supports the important evolution of the NRC regulatory framework to account for the design, operation, and safety enhancements of both small modular reactor and advanced reactor designs. 

US Energy Secretary Rick Perry directed the Federal Energy Regulatory Commission (FERC) in late September 2017 to undertake a rulemaking that would have enabled generation assets with secure on-site fuel supply (e.g., nuclear and coal plants) in organized markets to receive payments for reliability and resiliency. On January 8, FERC refused to accept that proposal, terminating the proposed resiliency compensation rule. Although FERC requested further comment and input on the importance of “resiliency” in organized markets, it is unlikely that it will act on this issue in the near term.

Read the full LawFlash.

The Nuclear Regulatory Commission (NRC) recently put the final nail in the coffin of a nearly 10-year proposed rulemaking effort that would have required licensees to remediate residual radioactivity resulting from licensed activities during facility operation, rather than at license termination as required by the current rules. The effort began when the commission approved the proposed decommissioning planning rule (DPR) in 2007. At that time, the commission was concerned that there could be “legacy” sites that could not complete complex remediation efforts due to inadequate financial or technical reasons, and that these sites would require the government to shoulder the burden to maintain and restrict access—and presumably complete site remediation. The proposed solution was to require remediation essentially as-you-go and thereby reduce the likelihood that any current operating facility would become a legacy site.