On July 9, President Biden signed the Accelerating Deployment of Versatile, Advanced Nuclear for Clean Energy (ADVANCE) Act of 2024 into law. Earning a vote of 88 – 2 in the Senate and 393 – 14 in the House of Representatives, the Act manifests strong bipartisan support for the growth of nuclear energy. The ADVANCE Act merits praise — it provides reasonable and targeted measures to reduce regulatory cost on the nuclear industry without resorting to deregulation. It strikes a workable balance between maintaining trust in an independent regulator and addressing a clean energy shortage. On the one hand, it maintains the independence of the Nuclear Regulatory Commission (NRC), a five-commissioner independent agency created by Congress in 1974 that oversees the licensing and operation of the largest source of clean energy in the United States and safest form of energy in the world. On the other hand, it halves hourly application review fees for advanced reactor applicants, incentivizes developers to begin the licensing process immediately, and expands the capabilities of the Commission. Nuclear energy advocates should recognize the legislation as an invitation for engagement with the NRC and an opportunity for the resurgent nuclear industry to prove itself.
The Act’s most significant boon to the nuclear industry is a series of provisions aimed to reduce the cost of regulatory review. By statute, the NRC must collect regulatory fees to recover certain expenses that currently constitute approximately 85% of its annual budget authority. Currently, this requirement means entities seeking licenses to construct or operate reactors pay for regulatory review at a rate of $300 per hour (set to increase to $317 per hour on August 19, 2024). However, under Section 201(c) of the ADVANCE Act, advanced reactor applicants will pay a different rate that will only recover the portion of the NRC’s budget spent directly on employee salaries and benefits. These direct costs contributed slightly less than half of the fee base used to calculate the $300 hourly rate in fiscal year 2023. With a fee base half the size, advanced reactor applicants may expect to pay rates closer to $160 per hour when Section 201 goes into effect on October 1, 2025. Because the average applicant for a combined construction and operation license accrues nearly 90,000 hours of billed review time, this provision could save advanced reactor applicants tens of millions in regulatory fees.
Some applicants may not have to pay at all. Under Section 202 of the Act, the first applicant to be issued an operating license in each of five categories will have the cost of their regulatory fees reimbursed. These five categories include: (1) the first licensed advanced reactor, (2) the first licensed advanced reactor that is fueled by spent nuclear fuel or depleted uranium, (3) the first licensed advanced reactor that is a “nuclear integrated energy system” designed to reduce greenhouse gas emissions and maximize energy production, (4) the first licensed reactor that can also produce process heat for industrial applications, and (5) the first reactor given permission to load fuel under the NRC’s new technology-inclusive licensing framework for which rulemaking is still ongoing. As Bill Gates’ advanced reactor company TerraPower already submitted an application to construct an advanced reactor in March, the company will likely win the race to the first prize and collect back an estimated $12.1 million in regulatory review fees.
Other provisions of the Act mandate and equip the NRC to license advanced reactors. The Act requires nearly a dozen reports from the NRC to Congress on issues important to licensees — including environmental review, reactor manufacturing, nonelectric reactor applications, generally authorized export destinations, and regulation of commercial fusion. Most notably, the Act also requires that the Commission issue new regulatory guidance for licensing micro-reactors within 18 months of enactment. To accomplish these mandates, Section 502 of the Act grants the Commission authority to recruit and appoint up to 210 “well-qualified individuals” without regard to civil service appointment restrictions. The Act also aims to promote a global role for American nuclear by allowing foreign investment, harmonizing standards across international regulatory bodies, and partnering with developing nuclear regulatory bodies abroad.
Crucially, the Act’s reduced fees and first-to-license prizes are confined to “advanced reactor” applicants, incentivizing construction of new, first-of-a-kind plants rather than traditional light-water reactor designs. The ADVANCE Act incorporates the definition of “advanced reactor” from the 2019 Nuclear Energy Innovation and Modernization Act (NEIMA). NEIMA defines an advanced reactor as a reactor with “significant improvements” compared to the Vogtle Unit 3 and Unit 4 reactors under construction when NEIMA was enacted. These improvements may include additional safety features, lower cost, reduced waste, increased fuel utilization, enhanced reliability, increased proliferation resistance, increased thermal efficiency, and ability to integrate electric and nonelectric applications. Notably, this definition favors construction of new, first-of-a-kind plants, which one commentator has argued would undesirably exclude the proven technology of large light-water reactors such as the Westinghouse AP1000s built at Vogtle.
On balance, the ADVANCE Act deserves praise for reducing exceptionally high regulatory costs and lowering barriers to the construction of new nuclear reactors. In a rare display of overwhelming bipartisanship on a key issue like energy, Congress met the nuclear moment to deliver targeted legislation aimed at energy independence, sustainability, and abundance. Through the Act’s incentives for applicants to start the licensing process now, it recognizes the urgency of developing abundant clean energy as soon as possible.
Beyond its provisions, it is also crucial to recognize where the ADVANCE Act did not go. The NRC remains a politically insulated five-commissioner independent agency that raises the vast majority of its annual budget from the entities it regulates. Even though Section 501 of the Act alters the NRC’s mission statement to not “unnecessarily limit” the benefits of atomic energy, the Act maintains the independent civilian nuclear oversight envisioned by the Energy Reorganization Act of 1974. That Act, by splitting the Atomic Energy Commission into the NRC and a predecessor of the Department of Energy, separated the functions of regulation and promotion of nuclear energy. The ADVANCE Act preserves this separation.
The Act also reduces regulatory cost without resorting to deregulatory methods. Halving hourly regulatory review fees for advanced reactor applicants is significant. But advanced reactor applicants will still need to prove their safety case to the NRC; they will — for now — still need to complete full environmental impact statements; they will still be subject to a mandatory hearing before a single atom is split. And once criticality is reached, they will still be subject to the same ongoing oversight that has kept American nuclear energy the safest form of energy on the planet. To the extent the Act encourages deregulation, it vests discretion in the regulatory authority to recognize its own opportunities for cost-reduction.
Industry advocates may criticize that the Act maintains what they argue is unjustified nuclear exceptionalism and severe regulatory burden. After all, no other infrastructure projects must be built to withstand the impact of a large commercial airliner, nor must other forms of energy maintain such robust quality assurance criteria. They may additionally note that the NRC restricts radionuclide emissions to an order of magnitude lower than the Environmental Protection Agency does under the Clean Air Act. Indeed, the Act does nothing to disturb these regulations. To some, the Act may not go far enough to remedy a climate crisis or spark an energy revolution.
Yet nuclear advocates should see the ADVANCE Act as an invitation to prove the potential of nuclear energy under its existing social license. Public zeal for new nuclear energy may be at a historic high, but this appetite is conditioned upon underlying trust in an independent regulator. If the nuclear industry can seize the moment, it may compound its gains in public support by offering much-needed solutions to climate fears and energy scarcity. But before it can realize any gains, the industry must engage optimistically and intelligently with a regulator that is here to stay. The ADVANCE Act invites this engagement and brings the resurgent nuclear industry closer to reaching criticality.
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