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The US Department of the Treasury’s Committee on Foreign Investment in the United States (CFIUS) published proposed rule changes on May 21 addressing when parties must notify the Committee of proposed transactions. The current regulations require parties to file a notice when the target US business is classified by one of 27 North American Industry Classification System (NAICS) Codes. The proposed regulations would rely on the US export control regulations and regimes – and not on NAICS codes – to determine when parties must notify CFIUS. In short, although the proposed changes represent an expansion of the potential industries affected by the mandatory declaration requirements through the elimination of the 27 NAICS codes, they narrow the focus for the nuclear industry to those foreign persons (and the countries where they are located) that are subject to export licensing requirements.

The Nuclear Regulatory Commission (NRC) and its Advisory Committee on Reactor Safeguards (ACRS) have been busy in recent weeks assessing issues related to the licensing of non-light water reactors (non-LWRs).

First, the NRC’s Division of Advanced Reactors transmitted a draft white paper titled “Non-Light Water Review Strategy” on September 30, 2019. As the title suggests, the white paper will “support the [NRC’s] review of applications for non-LWR designs submitted prior to the development of the technology-inclusive, risk-informed and performance-based regulatory framework . . . in 2027.” In so doing, the white paper describes both the contents of such applications and “an approach NRC staff may use to review the license basis information.”

The Nuclear Regulatory Commission (NRC) recently issued Revision 3 of Regulatory Guide (RG) 4.2, “Preparation of Environmental Reports for Nuclear Power Stations.”  Revision 3 provides a long-overdue update to RG 4.2, which was last revised in 1976.  Given the numerous changes to applicable environmental statutes, regulations, and executive orders since that time, the NRC issued two interim staff guidance (ISG) documents in 2014.  Revision 3 incorporates guidance from those ISGs insofar as it relates to information that an applicant must include in its Environmental Report (ER) for any requested permit, license, or other authorization to site, construct, and/or operate a new nuclear power plant.  Prior to issuing RG 4.2, Revision 3, the Staff published a draft version thereof in February 2017 and responded to comments received on the draft.

For more than two decades, the NRC and industry have worked independently and together to assess the viability of scalable emergency planning zones (EPZs) for small modular reactors (SMRs) and other advanced reactor designs. In a preliminary finding made public last week in an Advanced Safety Evaluation, the NRC Staff agreed with the Tennessee Valley Authority’s (TVA) request for exemptions related to emergency planning, submitted as part of TVA’s Clinch River Early Site Permit application (ESPA). That conclusion included exemptions from the 10-mile EPZ requirement. This event marks the first time that the NRC Staff has concluded that a plume exposure pathway (PEP) EPZ with a radius of less than 10 miles may be appropriate for a commercial nuclear power plant utilizing an SMR design. This development suggests that the NRC Staff is willing to consider less expansive EPZs when licensing SMRs, and presumably other advanced reactors, when the applicant has provided sufficient analysis and technical bases for doing so.

The NRC Staff sent a report on August 1 to the Commissioners that evaluates four options for revising regulations and guidance on physical security for advanced reactors. The Staff is recommending a limited-scope rulemaking that retains the current overall framework for security requirements in 10 CFR Part 73, but provides alternatives for advanced reactors for physical security. The Staff estimates that such a rulemaking could be completed within 44 months of the Commission’s authorization.

The NRC’s physical security requirements for large light-water reactors (LWRs) are intended to protect against attacks and sabotage. In addition to other measures, commercial power reactor licensees meet physical security requirements through the use of an armed guard force at an estimated cost in excess of $5 million per year at a given site.

The commissioners from the Nuclear Regulatory Commission (NRC) and the Federal Energy Regulatory Commission (FERC) held a joint meeting to discuss grid reliability and cybersecurity, including issues such as nuclear new build that factor into power availability. Both NRC and FERC staff provided presentations on the activities of both agencies to promote a stable, resilient, and secure grid, and a representative from the North American Electric Reliability Corporation (NERC) addressed grid reliability.

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. 

Over the last few years, a Defense Science Board task force evaluated energy systems for remote or forward operating bases, and its final report, dated August 2016, was recently made available to the public. The task force’s goal is to replace the diesel generators that serve as the standard electrical power source at these military bases. Alternate energy sources evaluated by the task force included very small modular nuclear reactors (vSMRS). vSMRs are designed to operate at less than 10 megawatts and to fit in a typical shipping container—in comparison to utility-scale reactors, which typically operate at 1,000 megawatts and are not mobile.

Congratulations to Morgan Lewis client NuScale Power on submitting to the Nuclear Regulatory Commission (NRC) the first-ever application for design approval of a small modular reactor (SMR). The NuScale SMR is designed to supply safe, affordable, clean, reliable power in scalable plants whose facility output can incrementally increase depending on demand. Its significant operational flexibility is also complementary to other zero-carbon sources like wind and solar.

The UK government has confirmed its commitment to move forward with the construction and operation of Hinkley Point C, the first new nuclear plant to be licensed in the United Kingdom since 1987. As a condition, the British government has stated that it will take a special or “golden” share to prevent the sale of significant ownership interests in Hinkley Point C and future nuclear plants without the government’s consent. However, such a condition should not impose a significant impediment to development of new nuclear power in the UK. In that regard, the condition is no more onerous (and probably less burdensome) than existing requirements in the United States to obtain Nuclear Regulatory Commission (NRC) approval for direct or indirect changes in ownership.