Federalism for Nuclear Power?

Nuclear power is so hot right now. Throughout the country, interest in nuclear power is higher than it’s been in decades, and many state governments are looking for ways to help bring a new generation of nuclear reactors to their states. State officials who wish to promote nuclear power face a serious obstacle, however. Unlike most types of electric generation, which are licensed or regulated primarily at the state level, nuclear power plants are federally licensed. The process for obtaining a federal license from the U.S. Nuclear Regulatory Commission (NRC) is long and cumbersome, and the regulatory roadblocks it puts up can severely limit states’ room to maneuver when it comes to nuclear policy.

Recently, a coalition of states has sought to reorder the balance of regulatory authority over nuclear energy by giving states a greater role in determining nuclear plant approval. Texas and Utah filed suit against the NRC in December, claiming the agency had exceeded its authority in requiring federal licensure for smaller nuclear plants.

The basis of the lawsuit involves a close reading of the NRC’s statutory authority to issue licenses for particular plants. The Atomic Energy Act of 1946 gave the Atomic Energy Commission (predecessor of the NRC) sweeping licensing authority over “any equipment or device capable of making use of fissionable material or peculiarly adapted for making use of atomic energy.” In 1954, however, the act was amended to narrow federal licensing authority. According to the new language, federal regulators had licensing authority over “any equipment or device, except an atomic weapon, determined by rule of the Commission to be capable of making use or special nuclear material in such quantity as to be of significance to the common defense and security, or in such manner as to affect the health and safety of the public.” In layman’s terms, regulators could only require a license for facilities large enough to pose a risk either to national security or to public safety.

Federal regulators treated these provisions as identical, requiring a license for all nuclear reactors regardless of size or other factors. As a result, federal licenses have been required even for research reactors like the one at Texas A&M University, which is so small it can barely power a single lightbulb.

This may have be somewhat understandable at the time, when large-scale light water reactors posed unique safety and national security risks as the model for nuclear generation. Today, an increasing focus in nuclear energy development is small modular reactors (SMRs), which have a much different risk profile. For example, while the meltdown of a standard reactor could require evacuation of the surrounding area, the NRC has concluded that a meltdown from an SMR likely would not require evacuation of the facility itself.    

Importantly, limiting federal licensing authority would not leave smaller nuclear plants unregulated. The narrowing of federal authority would simply clear the way for states to reassert their traditional role as primary regulators of electric generation within their borders. Different states could craft regulatory systems calibrated to their own preferences and situations.

It’s hard to say whether this suit will ultimately be successful; however, the notion that states should play a bigger role in nuclear regulation is a reasonable one. Regardless of the outcome, Congress and the NRC should consider creating regulations that give state governments more authority in overseeing the use of nuclear power in their states.