Proposed Legislation Would End NRC Fees for Safety Reviews of Advanced Reactor Designs

Bill to Spur Nuclear Energy Innovation

feesOn 12/08/21 U.S. Rep Anthony Gonzalez (OH-16) and U.S. Rep. Elaine Luria (VA-02) introduced the Accelerating Nuclear Innovation through Fee Reform Act, H.R. 6154, legislation designed to accelerate innovation and catalyze private sector investment in advanced nuclear reactor technologies.

The bill proposes to eliminate Nuclear Regulatory Commission (NRC) review fees for advanced reactor license applications.

Currently, advanced nuclear companies face onerous application costs that can reach tens of millions of dollars which are harsh disincentives to bringing their novel technologies to market.

“If the U.S. wants to be a climate leader while remaining energy independent, nuclear energy has to play a pivotal role in our nation’s energy mix,” Gonzalez said.

“Unfortunately, the current NRC fee model limits innovation by constraining the agency’s resources and discouraging nuclear innovators early in the project lifecycle. By eliminating application fees for advanced fission and fusion reactors, we can yield enormous innovation benefits that create jobs, improve our nation’s security, and generate more emissions-free energy.

“Advanced nuclear is one of the most significant contributors to America’s clean energy future,” Luria said. “We need to cut costs and red tape so that this technology can thrive. The Accelerating Innovation through Fee Reform Act will help jumpstart the advanced nuclear technology industry and promote clean energy growth in communities across the country.”

Key Endorsements of the Legislation

Several key nongovernmental organizations immediately endorsed the proposed legislation.  Key take-aways from their statements are included below.

third way logo“The bill helps foster technological innovation as new advanced reactor designs come forward for regulatory approval. It also helps the NRC innovate and adapt its licensing process without undue focus on the fee system as the NRC reviews these new designs and works toward establishing a technology-neutral framework as required by NEIMA.”

– Stephen G. Burns Senior Visiting Fellow, Third Way, Former Chairman and Commissioner, U.S. Nuclear Regulatory Commission

nia logo“This legislation is an important step forward for American energy policy as it signals continuing bipartisan support for advanced nuclear energy innovation to help meet our nation’s clean energy goals.

The current NRC fee model discourages innovation by advanced reactor developers by charging high fees for licensing reviews of new designs. This bill reforms the NRC fee recovery model by eliminating license review fees for new advanced nuclear reactors. Advanced nuclear energy can make a significant and timely contribution to climate protection and this legislation recognizes the benefits of advanced reactor development and deployment as a public good. We applaud the congressional sponsors for their leadership.”

– Judi Greenwald, Executive Director, Nuclear Innovation Alliance

clear path logo“Revising the NRC’s fee structure will help enable the deployment of next generation nuclear energy reactors by improving the regulatory process and eliminating unnecessary barriers.” “The Accelerating Nuclear Innovation through Fee Reform Act, led by Rep. Anthony Gonzalez (R-OH) and Rep. Luria (D-VA), will not only help alleviate the regulatory burdens for advanced reactor developers, but it will also accelerate their deployment – a true win-win.”

Rich Powell, Executive Director of ClearPath Action

Background for the Legislation

Under the NRC’s existing regulatory framework, the agency charges hourly fees to license applicants trying to build new advanced nuclear reactors that are safer, more economic, and quicker to deploy.

Unfortunately, this framework is largely predicated on conventional reactors instead of advanced reactors, which causes initial advanced reactor reviews to take longer and cost more. This puts innovators at a serious disadvantage because most startups are very early in their project lifecycles with little to no revenue.

By eliminating licensing fees for new reactors, Congress can further incentivize the development and deployment of nuclear innovation that reduces emissions, grows the economy, and improves overall nuclear safety.

H.R. 6154 has been referred to the House Committee on Energy and Commerce.

Fiscal Impact

If the legislation were to be enacted as proposed, Congress would need to appropriate funds to cover the agency’s expenses in reviewing new advanced reactor designs. As agencies cannot do work without an appropriation, an annual estimate would be needed to provide these funds and the total amount would be a limiting factor in terms of how many reviews could be undertaken and completed each year.

Another issue is that if you do away with the fees, and NRC has to rely on annual appropriations to do the reviews, if funding falls short, or one bad actor soaks the resources, the rest of the industry is out in the cold.

One alternative is for the funds to go to DOE for cost sharing with the applicant. The funds can be sent to NRC by DOE as part of an MOU. The cost sharing deal forces the applicant to have skin in the game, and also be a prudent user of the resources. This is how DOE worked with NuScale. DOE made the decision to fund NuScale. Continuing this practice would relieve the NRC of having to address the issue of commercial viability of an firm’s proposal and would keep that agency’s focus on the safety issues related to the reactor design submitted by the firm.

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Nuclear Innovation Alliance Endorses H.R. 6154

Nuclear Innovation Alliance (NIA) Executive Director Judi Greenwald issued the following statement on the introduction of the ‘Accelerating Nuclear Innovation through Fee Reform Act’ by Representatives Gonzalez and Luria.

“Introduction of the ‘Accelerating Nuclear Innovation through Fee Reform Act’ is an important step forward for American energy policy as it signals continuing bipartisan support for advanced nuclear energy innovation to help meet our nation’s clean energy goals.

The current Nuclear Regulatory Commission (NRC) fee model discourages innovation by advanced reactor developers by charging high fees for licensing reviews of new designs. These fees could exceed tens of millions of dollars for some innovative advanced reactor designs.

“This bill reforms the NRC fee recovery model by eliminating license review fees for new advanced nuclear reactors. This will reduce barriers for advanced reactor licensing, consistent with recommendations in the Nuclear Innovation Alliance Spring 2021 report on this topic  “Unlocking Advanced Nuclear Innovation: The Role of Fee Reform and Public Investment”

Advanced nuclear energy can make a significant and timely contribution to climate protection and this legislation recognizes the benefits of advanced reactor development and deployment as a public good. We applaud the congressional sponsors for their leadership.”

Eye Popping Numbers

The news media coverage on Reuters about the NIA report includes some eye popping numbers about what it costs to get a new advanced reactor design reviewed by the NRC.

The report says that newcomers to the field are getting socked in the checkbook by the cost of  moving their designs through the stages of the NRC’s evaluation.

“We’re two million dollars down the road with NRC fees, the formal application review hasn’t started and that will generate plenty of additional NRC invoices in the future. It’s important to know that this is for a demonstration platform that will not generate a dollar of revenue,” the Vice-President of Regulatory Affairs and Quality at Kairos Power Peter Hastings said during a webinar to present the NIA report.

However, the NIA report also notes that some companies agree that while the initial fees can be a huge impediment to newcomers, they help to weed out frivolous applications by a company looking for a cheap public relations win that would soak up the NRC’s time and resources.

The Effect of Fees as a Gate Keeper Function

To this point, and separately from the NIA report,  former NRC Commissioner Dale Klein, in a June 2007 speech before a large number of chief executives from the nuclear utility industry, issued what has come to be called, albeit outside the agency, the “no bozos” rule for involvement in building a nuclear power plant. While it didn’t address fees, what it did focus on is the the role of the NRC’s scrutiny of a new reactor design. Or as Navy Admiral Hylam Rickover once famously wrote, “paper reactors are easy.”

“The nuclear industry is not child’s play,” Klein said. The NRC is watching to make sure that “inexperienced companies” don’t jump on the nuclear bandwagon. He added that allowing “amateurs” to start up financing and construction of new plants “could threaten the resurgence of nuclear power in the US.”

Although Klein remarks were made a long time ago in a galaxy far away, they live on as still being relevant today.

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