NRC Approves Publication of Proposed Nuclear Reactor Transitioning to Decommissioning Rule

November 05, 2021

The US Nuclear Regulatory Commission (NRC) approved publication in the Federal Register of a proposed rule, “Regulatory Improvements for Production and Utilization Facilities Transitioning to Decommissioning” on November 3, 2021, in Staff Requirements Memorandum (SRM) SECY-18-0055. When finally adopted, this rulemaking, commonly referred to as the “Decommissioning Rule,” would comprehensively revise the NRC’s regulations applicable to the decommissioning of nuclear reactors. The Commission’s SRM and associated direction comes almost seven years after the rulemaking began and almost three-and-a-half years after the NRC Staff sought Commission approval in SECY-18-0055 to publish the proposed rule. Rather than codify the suite of commonly requested exemptions granted to plants transitioning to decommissioning, the Commission initiates additional dialogue on the role of the public in the regulatory process.

While the issuance of the SRM restarts the stalled rulemaking process, the SRM did not authorize the NRC Staff to publish the proposed rule as drafted in 2018. Rather, the Commission directed the NRC Staff to seek out and consider additional stakeholder comments during the notice-and-comment period, which is likely to further prolong the rulemaking process. The Commission’s direction generally requires the NRC Staff to provide additional opportunity for external stakeholder comments on the decommissioning process, particularly when and how external stakeholders can formally participate in the approval process. Given the current makeup of the Commission and extensive public interest in reactor decommissioning in recent years, this is not surprising. However, as Chairman Christopher Hanson acknowledged, even in directing the NRC Staff to evaluate this type of impact, the effect could “delay decommissioning activities and in turn postpone use of the remediated sites … after the conclusion of the decommissioning process.”

Below we summarize some important takeaways from SRM-SECY-18-0055 and the directions to the NRC Staff contained in the Commission’s voting record. As the decommissioning rulemaking continues, other important impacts may arise. Licensees and other stakeholders will have chances to comment on the provisions both in formal comments on the rulemaking and in other NRC engagement sessions.

Change in Risks After Closure of Zirc Fire Window

Perhaps most notably, the Commission accepted the NRC Staff’s recommendation that the decommissioning process at nuclear reactors could effectively be divided into four levels, rather than three as some stakeholders have suggested. Chairman Hanson and Commissioner David Wright agreed with the NRC Staff that regulatory requirements could be reduced after the closure of the so-called “zirc fire window,” i.e., the date on which it would take more than 10 hours after a major loss of water inventory from the spent fuel pool for the heat to cause the zirconium cladding to begin to burn. This time period is typically 10 months for a boiling water reactor or 16 months for a pressurized water reactor. Both agreed with the NRC Staff that the reduction in risk over time leads to the conclusion that requirements for protection could change. This is consistent with the exemptions issued under the current regulatory framework to many of the plants that have recently permanently ceased operation, and would reduce the need (and attendant costs) to obtain an exemption for similar plants in the future.

However, the Commission directed the NRC Staff to revisit its generic analysis of when the zirc fire window would close. Chairman Hanson and Commissioner Wright agreed that the spent fuel operating parameters used in the NRC Staff’s analysis—60 gigawatt days (GWd)/metric tons of heavy metal (MTHM)—conservatively bounds the current operating fleet but may not bound operating parameters for future licensees (including advanced reactor operators) that use higher burnup, higher enrichment, or different cladding materials. The Commission directed the Staff to consider whether a different decay period (i.e., longer than 10-16 months) is appropriate and how this longer decay period could be determined based on the operating history of the reactor.

Opportunities for Stakeholder Engagement on Post-Shutdown Decommissioning Activities Report

Among the decommissioning topics most commented on by external stakeholders was the post-shutdown decommissioning activities report (PSDAR) that licensees must submit to the NRC within two years after permanent cessation of operation. The PSDAR is reviewed by the NRC but there is no requirement that the NRC approve it. Instead, as Chairman Hanson explains, the “current regulatory framework assumes that decommissioning impacts are bounded by past licensing reviews, which have previously afforded an opportunity for the public to participate.” But because there is no NRC approval, there is no major federal action that would require a National Environmental Policy Act review by the NRC Staff, and there is no other licensing action that would give members of the public an opportunity to challenge the planned process for decommissioning in an NRC administrative hearing.

To address this alleged issue, the Commission directs the NRC Staff to revise the Decommissioning Rule to require that licensees identify in the PSDAR “decommissioning activities not bounded by previous environmental reviews.” For any activity that is “not bounded by prior reviews, the public should be afforded an opportunity to participate in the process before the decommissioning activity occurs.” Based on experience to date, however, there are likely to be few activities not bounded by previous environmental reviews. Nevertheless, this potential opportunity for the public to request a hearing is likely to lead to increased administrative litigation that delays the decommissioning process, increasing costs and the time necessary to complete decommissioning.

Similarly, the Commission directs the NRC Staff to update NUREG-0586, Supplement 1, Volumes 1 and 2, “Final Generic Environmental Impact Statement on Decommissioning of Nuclear Facilities.” The NRC Staff’s update is to include “specific guidance for resource areas that cannot be generically resolved,” which licensees will then have to address prior to commencing decommissioning. The NRC has similar constructs in its license renewal process, with the site-specific (Category 2) environmental impacts often forming the basis for challenges by intervenors in administrative licensing proceedings. Left open in the SRM is how the Staff is to evaluate whether the site-specific environmental impacts are resolved, but public interest in these issues is likely to be high.

Finally, the NRC Staff was specifically directed by Chairman Hanson to gather and consider additional feedback during the notice-and-comment period on whether the PSDAR should be formally approved by the NRC Staff and to evaluate “whether other changes to the decommissioning process should be proposed to account for the significant public interest in decommissioning.” If approved, such a process would impose a significant new barrier to timely decommissioning, directly contrary to the regulatory history of the current decommissioning rules, which was specifically intended to avoid unnecessary delays in the already well-established decommissioning process.

Use of Reactor Decommissioning Trust Funds for Spent Fuel Management or ISFSI Decommissioning Financial Assurance

The current NRC regulations limit use of decommissioning trust funds to “legitimate decommissioning activities consistent with the definition of decommissioning” in 10 CFR 50.2. “Decommissioning” in 10 CFR 50.2 is restricted to activities “to remove a facility or site safely from service and reduce residual radioactivity to a level that permits” release of the site for unrestricted use (or under restricted conditions) and termination of the reactor license. That is, 10 CFR 50.2 restricts decommissioning to radiological decommissioning activities.

The NRC Staff’s proposal in the Decommissioning Rule would have generically allowed licensees that had accumulated more than sufficient funds to complete decommissioning and met certain criteria to use nuclear decommissioning trust funds for spent fuel management and independent spent fuel storage installation (ISFSI) decommissioning without having to seek a regulatory exemption. In rejecting a codification of these prior exemptions for spent fuel management and ISFSI decommissioning, the Commission does not preclude the issuance of future exemptions to licensees that seek to use excess trust fund amounts to provide assurance for spent fuel management or ISFSI decommissioning. Rather, it maintains the burden on licensees to request and Staff to process site-specific exemption requests. It also does not preclude the established practice of designating separate sub-accounts within the larger trust fund that are earmarked for these other uses.

The Commission also directed the NRC Staff to update the decommissioning table of minimum amounts under 10 CFR 50.75(c) to, in the words of Chairman Hanson, “ensure it is more reflective of current cost considerations.” Chairman Hanson expressed concerns that the formula, which had not been updated in 35 years and generally is lower than the site-specific estimates licensees prepare, “erodes public confidence in the NRC and in its approach to decommissioning funding assurance.” Any changes to this minimum-amount table could have significant impacts on the requirements for funding of decommissioning trusts. However, Chairman Hanson suggested the NRC Staff consider whether the revised rule might have backfit application, notwithstanding Commissioner Jeff Baran’s view that backfitting cannot apply to reactors in decommissioning. 

NRC Staff Preliminary Approval of Irradiated Fuel Management Programs

As a final key takeaway, the Commission disapproved the NRC staff’s recommendation that it cease issuing “preliminary approval” of the irradiated fuel management program (IFMP) for permanently shutdown reactors. Under 10 CFR 50.54(bb), a licensee must submit its IFMP to the NRC, describing how it “intends to manage and provide funding for the management” of irradiated fuel at the site until final removal by the US Department of Energy. The NRC must then perform a final review of the plan as part of licensing after permanent cessation of operations.

However, as discussed above, there is no similar requirement for NRC approval or review of the PSDAR. As licensees and the NRC expect that spent fuel will be stored at the reactor site for a significant period of time after most other decommissioning work is completed, there has been significant public interest in IFMPs and the NRC’s role in reviewing and approving them. The Commission directed that the NRC Staff maintain its current process of review of IFMPs, apparently in response to external stakeholder comments and in the interests of giving more opportunities for external stakeholder engagement.

Future Steps

There was an approximately three month delay between the final vote (cast by Chairman Hanson on August 10) and the issuance of SRM-SECY-18-0055 this week. There are likely to be additional delays before the publication of the proposed rule in the Federal Register as the Commission directed that the NRC Staff “make conforming changes to the draft regulatory analysis, regulatory guidance, scope of the proposal, section-by-section analysis, and environmental assessment” of the proposed rule to reflect its direction. A timeline for the NRC Staff to make these conforming changes is not provided in the SRM.

Morgan Lewis has assisted clients with all stages of decommissioning. We are still reviewing the Staff voting records and the revised proposed rule and will provide future updates as the rulemaking proceeds.


If you have any questions or would like more information on the issues discussed in this LawFlash, please contact any of the following Morgan Lewis lawyers:

Washington, DC
Timothy P. Matthews
Paul M. Bessette
Grant W. Eskelsen