Lawsuit aims to accelerate small nuclear approvals

By EPN Staff

Texas, Utah and a nuclear energy company sued the U.S. Nuclear Regulatory Commission just before the end of the year, arguing the commission has overstepped its authority and essentially ground to a halt the construction of next generation small nuclear plants, including small modular reactors (SMRs) and microreactors.

The plaintiffs contend the Nuclear Regulatory Commission has been misinterpreting its authority since the 1950s, when Congress changed key language in federal law and narrowed the agency’s licensing authority. SMRs use too little nuclear material to meet the law’s threshold for NRC licensing, the lawsuit states.

If successful, the lawsuit could force one of the biggest changes to U.S. nuclear regulatory policy in decades, speeding approvals for small modular reactors (SMRs).

Why it matters

Public officials and business leaders across the country have been reassessing the role of nuclear energy in generation portfolios, and some of the world’s largest tech companies recently announced plans to power data centers with nuclear.

Texas Gov. Greg Abbott has called for Texas to be the No. 1 state for nuclear. Utah Gov. Spencer Cox has called for state spending and policy shifts to boost nuclear in his state as part of “Operation Gigawatt,” which is meant to double Utah’s power production over the next 10 years.

The lawsuit, filed in U.S. District Court for the Eastern District of Texas, argues SMRs portend “a revolution in nuclear power” because these smaller plants are cheaper, easier to site and faster to build than traditional nuclear plants.

“But building a new commercial reactor of any size in the United States has become virtually impossible—indeed, only three new commercial reactors have been built in the United States in the last 28 years,” the lawsuit states. “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.”

Last Energy’s argument

SMRs vary in size but top out at 300 megawatts, about half the output of a traditional nuclear facility. This lawsuit focuses on microreactors that generate 20 megawatts or less. Last Energy, headquartered in Washington, D.C., focuses on microreactor development.

“With a preference to build in the United States, Last Energy nonetheless has concluded it is only feasible to develop its projects abroad in order to access alternative regulatory frameworks that incorporate a de minimis standard for nuclear power permitting,” the lawsuit states.

As of 2024, Last Energy had agreements to develop more than 50 nuclear facilities in Europe, the suit states. The company’s “entire nuclear system operates inside of a container that is fully sealed with twelve-inch-thick steel walls, and as such, has no credible mode of radioactive release even in the worst reasonable scenario,” the lawsuit states.

The bigger picture

Even if the lawsuit is successful, SMRs would still be regulated, according to the lawsuit, since the NRC would still have oversight over the material that fuels reactors. State governments would also regulate these facilities.

SMR and microreactor supporters argue these advanced technologies will be a major part of the United States’ energy future, even though none are connected yet to the U.S. energy grid, and investors canceled the first project certified by the NRC in late 2023.

The U.S. Department of Energy says it has “long recognized the transformational value that advanced SMRs can provide,” and it announced a $900 million initiative last year to push the technology forward.

The NRC’s efforts

The suit asks a federal judge to set aside the NRC’s Utilization Facility Rule for small reactors. The commission has not yet filed a formal response, and its public affairs office did not immediately respond to a request for comment.

But Utility Drive recently reported that the NRC is in the early stages of a separate process to streamline the licensing of reactors smaller than 20 megawatts. And the federal ADVANCE Act, which became law last year, also requires the NRC to speed up its licensing process, Utility Drive reported.