In a rare legal challenge related to fees the NRC charges nuclear licensees for its services, the US Court of Federal Claims recently held that the costs of certain NRC services provided in connection with Confirmatory Orders (COs) are not recoverable via hourly bills to individual licensees. The court held that COs are essentially enforcement orders, and thus cannot be viewed as conveying an “individual benefit” to licensees.

In January, the US Nuclear Regulatory Commission’s (NRC’s) staff hosted a public meeting with industry representatives to discuss the staff’s progress in reviewing recommendations for the NRC’s Reactor Oversight Process (ROP) framework enhancement initiative. The objectives of the ROP enhancement initiative are to evaluate whether the baseline inspection program remains relevant for the current environment, eliminate redundant or unnecessary inspection areas, maximize efficient and effective use of resources, and incorporate flexibility in program implementation, where appropriate.

In 2018, the NRC solicited ideas for enhancing the ROP, which resulted in an industry proposal based on four points: US fleet maturity, improved safety margins, improved risk assessments, and greater use of risk-informed decisionmaking. Part of this proposal includes redefining labels for findings and combining Columns 1 and 2 of the Action Matrix. If the industry proposal prevails, it would mark a paradigm shift, considering Columns 1 and 2 have been in existence since the pilot program for ROP enhancement was introduced in 1999. As was stated at the public meeting, combining Columns 1 and 2 would be a long-term change. A proposal to remove Section 71152 of the Inspection Procedure, for problem identification and resolution, was also raised at the meeting but was generally dismissed.

This blog post is the first in a series that will track further progress on the ROP enhancement initiative.

On January 31, the US Nuclear Regulatory Commission (NRC) published a proposed rule to revise the professional hourly rate and flat licensing fees charged to licensees and applicants under 10 CFR Parts 170 and 171. Congress requires the NRC to recover 90% of its operating budget from fees, but certain new activities this year are excluded from that fee recovery requirement. For example, fees for advanced reactors will be carved out from the 90% fee recovery. Despite the carve-outs, NRC fees for each operating reactor will increase by approximately $330,000 (or 7.3%) from FY 2018.

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.

The Office of the Federal Register (OFR) is impacted by the partial government shutdown, and is now operating under the special procedures set forth in its December 10, 2018, notice (83 Fed. Reg. 63540) that anticipated a potential funding hiatus. In order to comply with the Antideficiency Act, the OFR will not publish routine notices, but rather it is requiring that agencies such as the Nuclear Regulatory Commission (NRC) certify that any notice to be published in the Federal Register meets an applicable exemption for “emergencies involving the safety of human life or protection of property.” By the express language in 31 USC § 1342, as amended in 1990, this exemption “does not include ongoing, regular functions of government the suspension of which would not imminently threaten the safety of human life or the protection of property.” Therefore, the NRC staff has indicated that publication of a notice for a licensing action, such as a notice of an application for a license amendment, could be delayed due to the above limitations.

In late September, the US Nuclear Regulatory Commission (NRC) made public a White Paper that it had initially issued internally to the Office of Nuclear Reactor Regulation (NRR) in March 2012. The White Paper, titled “NRC and Licensee Actions in Response to New Information from a Third Party,” discusses NRC expectations for how licensees should consider new information received from a third party that may affect a plant’s Final Safety Analysis Report (FSAR). It is our understanding that the White Paper is being released at this time due to a Freedom of Information Act (FOIA) request. Nonetheless, licensees should be aware of this White Paper and its potential impact should the NRC decide to apply this “guidance.”

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.

As William Faulkner once said, “The past is never dead. It’s not even past.” Major infrastructure project developers may feel this way when preparing for environmental reviews as part of licensing action due to a new decision from the US Court of Appeals for the DC Circuit. In American Rivers v. FERC, Case Nos. 16-1195 & 16-2336 (2018), the DC Circuit found that the actions of the Federal Energy Regulatory Commission (FERC) were arbitrary and capricious when the agency issued a renewed operating permit to a hydroelectric plant. The DC Circuit concluded that the supporting environmental analysis treated the continued operation of the plant as the “environmental baseline” and therefore failed to consider the environmental impacts associated with the initial licensing, construction, and operation of the plants.

The facts of American Rivers are straightforward. When a utility applied to relicense its hydroelectric plants along the Coosa River in Alabama, the US Fish and Wildlife Service (USFWS) and FERC were required to analyze the environmental impacts of relicensing by the Endangered Species Act and the National Environmental Policy Act (NEPA). The two government agencies did so, but used the current status of the Coosa River, i.e., with multiple hydroelectric projects already built along the river, as the “environmental baseline” from which the analyses began. By utilizing this baseline, the analyses only considered changes to the current conditions of the river, while environmental groups argued that the existing plants on the river had already had detrimental impacts on various endangered aquatic animals and the environment. Those groups argued that beginning the analyses from the current “degraded” baseline was not permissible and that the analyses needed to consider the impacts from project construction and operation in the past.