Last Energy, alongside the attorneys general of Texas and Utah, has filed a significant lawsuit against the Nuclear Regulatory Commission (NRC) challenging long-standing regulations governing nuclear reactor licensing. The suit, initiated on December 30, 2023, seeks to exempt small reactor designs from strict NRC oversight, claiming these regulations are not only outdated but pose unreasonable barriers to innovatory advancements within the nuclear energy sector.
At the heart of the complaint is the assertion by Last Energy—a company poised to lead developments in advanced nuclear technology—that the NRC's definitions and regulations have become excessive and counterproductive. Specifically, the plaintiffs argue these rules hinder the growth and deployment of smaller, safer reactor technologies by imposing onerous licensing requirements. "Building a new commercial reactor of any size in the United States has become virtually impossible," said the plaintiffs, reflecting the frustrations felt across the industry.
The lawsuit was filed in the Eastern District of Texas, where it emphasizes the need for the NRC to revisit and revise its longstanding licensing framework, which has been criticized as overly burdensome and restrictive for developmental projects focused on microreactors, such as Last Energy’s 20-megawatt (MW) design.
According to the plaintiffs, the legal action is not merely about easing regulations but about redefining terminologies and classifications within the NRC’s purview. The complaint asserts, "The NRC misinterprets its authorization under the Atomic Energy Act of 1954, which regulates reactors adequate to affect public health and safety." Given the design of Last Energy’s reactor, it is argued, it ought to fall outside the stringent definitions of nuclear "utilization facilities" set forth by the commission.
This lawsuit raises important questions about the future of nuclear power innovation within the U.S., especially as it has been reported by various sources, including Utility Dive, which noted the substantial decline of commercial reactor builds—only three have been constructed over the last 28 years. This decline is attributed to factors such as regulatory hurdles rather than technological limitations or lack of market demand.
Patrick White, research director at the Nuclear Innovation Alliance, stresses the need for discussions about “proportional regulatory requirements…that align with the hazards of the reactor and correspond to safety.” He indicates the lawsuit presents an opportunity to rethink how the NRC can adapt its regulatory framework for advanced nuclear technologies.
Last Energy’s concerns are echoed by numerous other developers who face similar challenges when trying to navigate the NRC's lengthy licensing process. The plaintiffs have not engaged with the pre-application processes established by the NRC, which can take years before even submitting formal applications. Waiting for formal evaluations could extend well beyond two years, creating substantial delays.
Despite advancements and landmark projects such as Bill Gates-backed TerraPower's planned 345-MW reactor, which only began its non-nuclear construction phase amid regulatory delays, industry leaders believe progress is vexatiously slow. TerraPower, like Last Energy, aims to expedite development timelines to demonstrate new technology successfully.
The NRC is simultaneously working on the "Part 53" rulemaking process, which it asserts recognizes the need for more flexible and proportional regulations catering to advanced nuclear technologies. This new framework, if successfully executed, is expected by 2027. White remarks, "The completion of Part 53 could potentially move us toward this idea of a more scaled regulatory framework for advanced nuclear reactors," spotlighting the significance of this legislation on the future of nuclear power.
The recognition of these needs is not isolated; rather it mirrors the proactive measures being taken across the globe. Last Energy indicated it has been cultivating development agreements for over 50 reactors across Europe, attracting attention for its projects, one of which includes transforming former coal sites—in Wales, with the anticipation of coming online by 2027.
While reactors exempt from the NRC's stringent definitions still remain under oversight for safety and security concerns, this legal challenge encourages lawmakers and industry stakeholders alike to seriously evaluate how the U.S. might engage with the rapid evolution of nuclear technology. Patrick White captures this sentiment accurately, stating, “The suit demonstrates the level of interest from states and developers about how we get nuclear technology quickly on the market.”
Looking forward, stakeholders are hopeful. The NRC is reportedly initiating efforts to streamline licensing for microreactors—those smaller than 20 MW—with objectives to reduce the time taken for processing new license applications, as mandated by legislation like the bipartisan ADVANCE Act.
Yet, the success of these initiatives largely depends on addressing the specific issues outlined within the current lawsuit, as this case signals not only the legal battle but also the growing momentum for change within the regulatory environment governing nuclear energy. With potential legal precedents on the horizon, the future of small nuclear reactors might just hinge on this pivotal court decision.