The New Jersey Board of Public Utilities (BPU) approved applications submitted by PSEG Nuclear LLC seeking subsidies of up to $300 million annually, in the form of zero emission credits (ZECs), for PSEG’s Hope Creek and Salem 1 and 2 nuclear generating stations on April 18. The PSEG applications were filed on December 19, 2018, after New Jersey enacted legislation on May 23, 2018, establishing a ZEC program for the state (the ZEC Act).

President Donald Trump on January 14 signed into law the Nuclear Energy Innovation and Modernization Act (NEIMA), Pub. L. 115-86, after it was passed by Congress in late December 2018. NEIMA covers a wide variety of issues, but two main topics should be particularly welcomed by the nuclear industry: relief from US Nuclear Regulatory Commission (NRC) fee collection and the clear direction to speed the rollout of an NRC licensing framework for advanced nuclear reactors.

A partial government shutdown currently looms on the horizon. The US Nuclear Regulatory Commission (NRC), however, has a budget funded through FY 2019, so it would not be impacted if the government shuts down.

The NRC did experience the effects of a federal government shutdown in 2013. Then, the NRC furloughed 3,600 of 3,900 staff members. The 300 essential personnel who stayed on included about 150 resident inspectors. All public meetings were suspended, and Atomic Safety and Licensing Board hearings were postponed. However, the Inspector General’s Office, as well as the NRC’s hotline for safety and security concerns, continued to function.

A bipartisan group of nine US senators introduced the Nuclear Energy Leadership Act (NELA), S. 3422, on September 6. According to a press release announcing the bill’s introduction, NELA will “boost nuclear energy innovation and ensure advanced reactors can provide clean, safe, affordable and reliable power to meet national and global energy needs.” The legislation was introduced by Senators Lisa Murkowski (R-AK), Cory Booker (D-NJ), James Risch (R-ID), Shelley Moore Capito (R-WV), Mike Crapo (R-ID), Richard Durbin (D-IL), Joe Manchin (D-WV), Sheldon Whitehouse (D-RI), and Chris Coons (D-DE).

If enacted, NELA would provide support for advanced reactors, including a program to provide a source of low-enriched, high-assay uranium to advance nuclear reactor technology development. According to the sponsors, the bill plans to incentivize public-private partnerships among the federal government, research institutes, and private industry. The bill also includes education initiatives, workforce development, and training for nuclear science. In addition, NELA would direct the US Department of Energy (DOE) to provide a “versatile, reactor-based fast neutron source, which shall operate as a national user facility” by no later than the end of 2025.

Of particular note for advanced reactor fuel designs, NELA authorizes the issuance, through sale, resale, transfer, or lease, of low-enriched uranium from DOE stockpiles of high-assay, low-enriched uranium fuel to support fuel testing and nuclear demonstration projects. This program would make available high-assay low-enriched uranium, with at least two metric tons of uranium-235 available by the end of 2022 and 10 metric tons available by the end of 2025.

NELA also directs DOE to create programs to support demonstration projects for advanced reactor designs, identify areas for fundamental nuclear research, and grant the private sector increased access to the results of federally funded nuclear research. NELA specifically directs DOE to enter into at least four separate nuclear demonstration project agreements by 2028, and to explore advanced materials research and fuel designs through fundamental research. The bill also would allow the Secretary of Energy to establish a long-term pilot program to enter into a power purchase agreement for nuclear power for up to 40 years. The pilot program would be intended to give “special consideration” to “first-of-a-kind or early development nuclear technologies that can provide reliable and resilient power” to off-grid locations.

The US House of Representatives and Senate recently passed the Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA) as part of the reconciled conference report for the Fiscal Year 2018 National Defense Authorization Act (NDAA). The president signed the bill on August 13 and new legislation will take effect on a rolling basis. Although several broad based changes will affect all industries, the nuclear industry will be relieved that the final bill addresses the concerns the industry raised at the outset when the original bill created challenges for US companies’ ability to compete in international trade. However, the industry still needs to monitor the anticipated regulatory implementation as the US Department of Treasury drafts new regulations. Other agencies, including the US departments of Commerce (DOC) and Energy (DOE) will implement their policy and regulatory changes to address FIRRMA. Morgan Lewis discussed the potential steps nuclear companies could take to be ready for any changes resulting from FIRRMA in a previous Up & Atom post.

In a June 26 letter, a broad coalition of 77 former government officials, lawmakers, and industry leaders urged US Department of Energy (DOE) Secretary Rick Perry to take “concrete steps” to prevent the premature shutdown of any additional nuclear power plants.

The letter commends Secretary Perry’s support of the nuclear industry to date but asks him to specifically promote the national security significance of nuclear energy. In doing so, the letter underscores the key role that nuclear energy plays in national security, particularly as an essential component of electric grid resilience and the largest source of emission-free generation.

The letter acknowledges that discussions of the general importance of nuclear energy are underway at the Federal Energy Regulatory Commission as well as at the grid operator and state regulator levels, but asserts that only DOE has the power to integrate nuclear power into the broader national security imperatives. The letter notes that such an integration will take time to consider, but asks Secretary Perry to ensure that no more nuclear power plants are closed in the meantime.

This letter appears to support President Donald Trump’s June 1 request for DOE to take measures to prevent further closures of nuclear power plants due to a national security interest in securing the national power grid's resilience.

We reported last month that the Council on Environmental Quality (CEQ), the US federal agency responsible for coordinating and overseeing federal agency implementation of the National Environmental Policy Act (NEPA), had signaled its intention to update the CEQ’s longstanding NEPA-implementing regulations (40 CFR Parts 1500-1508). On June 20, the CEQ initiated the rulemaking process by publishing an Advance Notice of Proposed Rulemaking (ANPR) in the Federal Register (83 Fed. Reg. 28,591). The ANPR seeks public comments “on potential revisions to update the regulations and ensure a more efficient, timely, and effective NEPA process consistent with the national environmental policy stated in NEPA.” The deadline for comments is July 20, 2018.

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.

Senator Benjamin Cardin (D-MD), along with a bipartisan group of senators that includes John McCain (R-AZ), Marco Rubio (R-FL), Lindsey Graham (R-SC), Amy Klobuchar (D-MN), and Dick Durbin (D-IL), introduced S.94, the “Counteracting Russian Hostilities Act of 2017.” While widely reported on for its proposed sanctions on the Russian Federation for cyberattacks on the United States, S.94 also contains a little-discussed provision aimed at civilian nuclear trade with Russia.

Section 209 of the bill would penalize any person who makes an investment that directly and significantly contributes to enhancing the ability of the Russian Federation to construct civil nuclear power plants. While the bill certainly covers the construction of civil nuclear plants in Russia, it is broadly phrased in a manner that could cover Russia’s construction of civil nuclear plants in other countries as well. The restriction on investments is limited to nuclear power plant construction, but the bill also would penalize any person who sells, leases, or provides goods, services, technology, information, or support to the Russian Federation that “could directly and significantly facilitate the maintenance or expansion of the construction, modernization, or repair of civil nuclear plants by the Russian Federation.” The dollar threshold for investments or goods, services, etc. is $1 million per transaction and $5 million per 12-month period.