The states of Texas and Utah—along with Last Energy, a company that builds small modular reactors—are suing the Nuclear Regulatory Commission (NRC), arguing that it is exceeding its statutory authority by regulating even very small reactors including university research reactors and the 20 MWe reactors that Last Energy manufactures. The NRC is the agency that regulates civilian nuclear power in the United States mostly by licensing and inspecting reactors.
Small reactors have much different risk profiles than larger reactors and may not meet the standards for regulation as laid out by the Atomic Energy Act of 1954. Under this law, a “utilization facility” (those the NRC has the authority to regulate) is defined in this way:
The term “utilization facility” means (1) any equipment or device, except an atomic weapon, determined by rule of the Commission to be capable of making use of special nuclear material in such quantity as to be of significance to the common defense and security, or in such manner as to affect the health and safety of the public, or peculiarly adapted for making use of atomic energy in such quantity as to be of significance to the common defense and security, or in such manner as to affect the health and safety of the public.
This definition is worded in a way that excludes certain nuclear technologies: those that don’t use enough nuclear material to create a national security risk and pose little risk to public health and safety. Many small reactors consume very small quantities of fissile material and have very low risk profiles—possibly putting them outside of this definition. The plaintiffs in the lawsuit assert that “the agency failed to ‘articulate a satisfactory explanation’ for including the smallest and safest reactors within its regulatory ambit.”
This “utilization facility” definition is also a change from the previous statute, the McMahon Act, which had a broader definition. It covered all “equipment or device[s] utilizing fissionable material or atomic energy.” Despite this change made by Congress in the Atomic Energy Act to narrow what could be regulated, the Atomic Energy Commission (a predecessor to the NRC) still promulgated a rule maintaining a broad definition that assumed Congress didn’t narrow the definition. The plaintiffs in the case point out that “the agency expressly recognized its scope of authority had been narrowed by statute—but then adopted the exact same interpretation it had used before the statutory change.”
Congress wanted to exclude some reactors following the amended definition made in 1954. The very smallest reactors are the right place to start. The NRC, itself, has stated that microreactors don’t pose health and safety risks. The plaintiffs argue that very small reactors, including university reactors only capable of powering a single LED bulb, should not fall under the utilization facility definition.
This distinction between reactors is becoming more important as more commercial micro and small reactor companies emerge. How these technologies are regulated will determine if innovation occurs in the U.S. or is forced abroad. Last Energy chose to build its reactors abroad in large part because of the difficulty of getting NRC approval.
A legal win for Texas, Utah, and Last Energy would require the NRC to vacate the existing regulation and instead start a new rulemaking that properly acknowledges the statutory definition of utilization facility. This would mark an important shift away from NRC’s current overbroad application of its regulatory authority. It could fuel significant innovation in the nuclear space to ensure that the NRC doesn’t continue delaying the construction of new reactors—a move shown to significantly raise the costs involved for developers. Very small reactors have important differences with large conventional reactors and treating them as such would be a boon to innovation.
Including all reactors under NRC authority fails to understand both the plain language of the law and the breadth of reactor designs available. Hopefully, this case results in a revising of the utilization facility definition that allows reactors to be better regulated.