Estimated read time: 5-6 minutes
- Louisiana joins Utah and Texas in a lawsuit against the U.S. Nuclear Regulatory Commission.
- The lawsuit claims commission's regulations hinder nuclear reactor development, citing Last Energy's struggles.
- Critics argue the commission's cautious approach is necessary for safety and cost concerns.
SALT LAKE CITY — In the United States, only three commercial nuclear reactors of any size have been built in the last 28 years.
A lawsuit filed by Texas, Utah and a nuclear startup company called Last Energy, and joined this week by Louisiana, targets the U.S. Nuclear Regulatory Commission, arguing the lack of nuclear reactor development is by design.
"The root cause is not lack of demand or technology — but rather the U.S. Nuclear Regulatory Commission (NRC), which, despite its name, does not really regulate new nuclear reactor construction so much as ensure that it almost never happens," the lawsuit reads. "Despite the promise of advanced nuclear technology to improve safety and reliability, and despite numerous laws designed to encourage small modular innovation, the NRC's misreading of its own scope of authority has become a virtually insuperable obstacle."
This obstacle, the lawsuit asserts, is not the regime Congress envisioned.
A regulatory nightmare?
The lawsuit details that Last Energy has invested tens of millions of dollars in developing the technology for small nuclear reactors, including $2 million on manufacturing efforts in Texas alone. Last Energy's entire nuclear system operates inside of a container that is fully sealed with 12-inch-thick steel walls, and as such, has no credible mode of radioactive release even in the worst reasonable scenario.
Although it has a preference in the United States, the company has been forced to turn to foreign countries because of the Nuclear Regulatory Commission, according to the lawsuit.
"As of 2024, Last Energy has agreements to develop over 50 nuclear reactor facilities across Europe, which would produce power worth tens of billions of dollars over their lifetime," the lawsuit reads.
One such project in the United Kingdom would lead to $400 million in investment for the economy in Wales.
The states and company want a rule called the Utilization Facility Rule nixed, arguing it is being applied in an arbitrary and capricious fashion that hamstrings development of advanced nuclear technologies such as small modular reactors and microreactors.
The lawsuit states that the Department of Energy has observed that small modular reactors, or SMRs, typically offer numerous advantages over traditional nuclear power plants. These include lower cost and capital investment, because small modular reactors units are typically modular, prefabricated and then installed on-site; have a smaller footprint, creating greater siting flexibility and allowing deployment in locations inaccessible to conventional nuclear reactors; require less frequent refueling; and have greater efficiency and faster construction, facilitating incremental development.
The lawsuit argues the stringent permitting regulations on these advanced nuclear technologies do not match the health and safety risks they pose.
"Even before the prevalence of many of the safety features that are built into typical modern SMRs, nuclear power was already far safer than almost every other leading form of power generation. For example, hydropower results in 43 times as many deaths as nuclear power, natural gas 93 times as nuclear power, biomass 153 times as many, oil 613 times as many and brown coal 1,090 times as many; even wind power is deadlier and solar is barely safer," the suit reads.
In fact, the suit points out, in terms of radiation exposure alone, fly ash — an emission from power plants burning coal — is far more radioactive than emissions from nuclear waste. Fly ash emitted by a coal plant can release up to 100 times more radiation into the atmosphere than a nuclear power plant producing the same amount of energy.
When rules get in the way
The Utah Associated Municipal Power Systems, a consortium of independent power producers like Bountiful, Murray and Lehi, sought a source of baseload power given the pressure on coal-fired power plants.
They partnered with nuclear energy developer NuScale and the Idaho National Laboratory to site a small modular nuclear reactor as a viable baseload alternative.
But years of permitting delays drove up costs outside of what was feasible, so the effort was scrapped despite the investment of hundreds of millions of dollars.
The licensing costs are high.
Utilization facilities that are operating power reactors must pay annual fees of $5.3 million dollars. The lawsuit points out that the Nuclear Regulatory Commission is anticipating collecting over $808 million in fees from private parties in fiscal year 2024.
"Even apart from specific fees, the ongoing regulatory burden is immense. One study from 2017 estimated that the average nuclear plant bears an NRC-imposed regulatory burden of $60 million annually, when fees, paperwork compliance, and capital expenditures are considered," the lawsuit contends.
Both Texas and Utah claim injuries due to the Nuclear Regulatory Commission.
"Utah recognizes it's headed toward an energy crisis due to rapid population growth, increasing electrification of society, more energy intensive industries, and retiring baseload power sources. To address the problem, Utah needs and plans to double its power production over the next decade via a recently announced initiative called 'Operation Gigawatt,'" the lawsuit says.
"But Utah's ability to use (or allow industry to use) SMRs to address the energy crisis is severely and unnecessarily restricted by the NRC's unlawful regulations," it asserts.
Last Energy said after spending $2 million on a project to manufacture nuclear reactors in Texas, it was forced to abandon it because of "prohibitive" federal regulations and instead move its investment to foreign countries.
"Last Energy determined the cost and time to receive a license in the United States was so radically disproportionate to the risk that it was infeasible to pursue as a small business, despite having superior technology that would benefit Texas and the rest of the United States," according to the lawsuit.
In 2024, then-Rep. John Curtis, R-Utah, introduced the Advanced Nuclear Reactor Prize Act that authorized the U.S. secretary of energy to award grants to cover fees assessed by the U.S Nuclear Regulatory Commission.
"The costs and red tape associated with our permitting process are proving to be duplicative and ineffective," Curtis said. "We need innovation in the nuclear space to ensure affordable, reliable and clean energy in our future and Congress must do more to ensure that can happen."
Curtis, now a senator, successfully got the legislation through and it was signed by President Joe Biden.
Critics of nuclear energy, however, argue it is right that the government takes it time on nuclear energy in the interest of public safety, nuclear waste storage issues and, ultimately, the cost to ratepayers.
