Against All Expectations: The Modernization of the Nuclear Regulatory Commission

• NRC has a reputation for being rigid and inhospitable to innovation. For companies that are reimagining the design of a nuclear reactor, that makes it pretty tough to attract investment
• But based on Third Way analysis, NRC has made major progress over the past few years to modernize its structure and processes to better accommodate advanced reactor developers.
• While licensing a new nuclear reactor will always be challenging, these steps are a positive indicator that NRC is willing to adjust in order to keep up with fast-evolving technologies.

Over the last four years, a diverse portfolio of innovators has emerged in the United States that is working to develop advanced nuclear reactors that provide carbon-free electricity and heat on the commercial market. When Third Way started our work assessing the potential of advanced nuclear, there was deep skepticism that innovators could overcome two obstacles unique to working in the civilian nuclear sector: getting access to the National Labs for needed research, and navigating a Nuclear Regulatory Commission (NRC) licensing process that was seen as opaque, cripplingly expensive, and far too time consuming.

In an era when the federal government seems more broken than ever, it comes as a big surprise to many that these obstacles are being slowly but steadily removed. Congress and the Department of Energy (under two very different administrations) have made significant strides to open the National Labs for research. A new program was created to help streamline cooperation between private innovators and National Labs. New funding sources have been created to help companies overcome technical challenges. Democrats and Republicans even came together to pass a new law accelerating advanced nuclear research.¹

The action in Congress and at the Department of Energy has received the lion’s share of attention. Meanwhile, a more quiet transformation is happening at the NRC. In order to reach commercial markets in the U.S., advanced reactor designs must go through rigorous safety reviews by the Nuclear Regulatory Commission. While the new generation of nuclear technologies and the developers behind them are known for being innovative, disruptive, and fast-moving, the NRC is often perceived as rigid, inefficient, and prone to delays.

This reputation of an inflexible regulator is hindering the commercialization of advanced nuclear reactors. It’s been a major concern for reactor developers whose designs don’t fit the mold that NRC is used to working with. And the idea of projects languishing and collapsing during a protracted, inefficient licensing process certainly doesn’t help win over potential investors for these emerging technologies. One of the leading advanced reactor developers put it this way: “At NuScale we believe that revolutionary technology requires new rules and new ways of thinking. Some of the key challenges we face are in areas where innovation deviates substantially from the designs considered when their regulations were developed…it is important to develop a more flexible and less costly regulatory framework to further encourage innovation.”

However, the NRC is taking important steps to shake this reputation by adapting its regulatory culture and practices in order to effectively engage with an advanced reactor sector that is undergoing significant change. Based on public information and feedback from an impressive number of advanced reactor developers currently engaging with NRC, it is evident that:

• Leadership is committed to modernization;
• The Commission staff is working to improve the quality and consistency of its interactions with developers; and
• Current processes, regulatory guidance, and rules are being adapted to ensure they are more flexible and technology-inclusive.

Although the transformation is well under way, there’s certainly more work that needs to be done, as the leaders and staff at the NRC would likely be the first to acknowledge.  That’s the case with any dynamic organization in the middle of a changing field. Our analysis has found, however, that greater opportunities for stakeholder engagement, collaboration with DOE and industry, and an organizational commitment to create a more inclusive regulatory framework is putting the licensing body on the right track to effectively review diverse advanced reactor licensing applications.

“At NuScale we believe that revolutionary technology requires new rules and new ways of thinking. Some of the key challenges we face are in areas where innovation deviates substantially from the designs considered when their regulations were developed…it is important to develop a more flexible and less costly regulatory framework to further encourage innovation.”

Change Coming from the Top

One of the most important signals of change at NRC is the consistent and public commitment from senior officials to adjust their longstanding strategies in order to efficiently review and license advanced reactors. NRC Chairman Kristine Svinicki confirmed this during Third Way’s 2018 Advanced Reactor Summit, explaining that the Commission aims to create greater flexibility in the regulatory review process for advanced reactors, as well as more technology-inclusive policies within NRC.² Recently-confirmed Commissioner Annie Caputo also has an appreciation for and deep familiarity with advanced reactors and the challenges they face, having overseen legislative efforts on these issues as a senior staffer on Capitol Hill.  

At a September 2018 Nuclear Energy Institute Advanced Reactor Working Group meeting, Office of New Reactors (NRO) Director Fred Brown discussed efforts to get “back to basics.” Essentially, he noted that voluntary regulatory guidance has slowed advanced reactor developers by requiring NRC staff to go through detailed checklists, when the actual regulations are often more technology-inclusive and flexible.

Former NRC Executive Director of Operations Victor McCree led the NRC Transformation Team, which recently published its “Strategy to Transform the Agency Licensing Process.” The study notes concerns raised about the NRC, then outlines four key initiatives that NRC staff ought to implement, which are broadly related to risk and safety, digital instrumentation and controls, flexibility, and specific regulatory approaches for advanced reactors.³

Although it is a positive sign that senior officials are supportive, as with any organization, it is difficult to ensure cultural change is internalized by all staff members. The NRC is making progress and should continue to formalize this transition to enable innovation and flexibility. Ashley Finan, Executive Director of the Nuclear Innovation Alliance, observed “I’m encouraged by the current Commission and its dedication to efficiency and innovation. Change can start at the top, but it also must permeate to all levels of staff, if it is to have lasting and practical impact. I’m confident it can be done, but it will indeed require transformation.”

As Dr. David Hill, Chief Technology Officer of Terrestrial Energy USA, has remarked, “Terrestrial Energy USA has been delighted with the amount of preparatory work the US NRC has done to ready itself to license the IMSR [Integrated Molten Salt Reactor] in the USA.” 

More Productive Interactions with Developers

The NRC is often perceived as uncommunicative and not particularly transparent. Developers and stakeholders have complained that NRC is unclear in its expectations, and that the process for getting guidance from the Commission is cumbersome, even on less complex issues. Better communication and more collaboration between NRC, industry, and other stakeholders could lead to the development of a regulatory process that is more efficient, more predictable for applicants, and that still ensures stringent safety standards. In recent years, the NRC has worked to change its culture and communication style when engaging with advanced reactor developers, offering more rapid and regular feedback. Many developers have acknowledged these efforts, and noted how the shift from rigid and infrequent interactions toward a more informed conversation with NRC staff is taking some of the guesswork and inefficiency out of the licensing process. Such changes stand in contrast to perceptions of the NRC as uncommunicative and nontransparent.

Creating Opportunities for Better Engagement

The NRC has been exploring a variety of methods to more effectively communicate with advanced nuclear developers. For instance, from 2015 to 2017, the NRC partnered with the Department of Energy to hold the NRC-DOE Advanced Reactor Workshops, which brought together a range of advanced reactor stakeholders to discuss opportunities and challenges in the advanced nuclear industry. These workshops allowed the NRC to explain its approach to advanced reactor licensing and provided openings for industry groups and companies to discuss their preferences and concerns. After the success of these workshops, the NRC has decided to hold smaller, public focus-group meetings with industry stakeholders every six weeks.⁴

The NRC has also looked internationally to identify, discuss, and converge on best regulatory practices. Some advanced reactor projects intend to participate in both the US and Canadian energy markets, which has encouraged the NRC to observe and collaborate with the Canadian Nuclear Safety Commission (CNSC) as these companies progress through each country’s respective regulatory pathway. By monitoring the processes used by our neighbors to the North, the NRC may be able to gain useful insights that could help inform their own approach when these companies apply in the United States, allowing for a more efficient and effective review process.

“I’m encouraged by the current Commission and its dedication to efficiency and innovation. Change can start at the top, but it also must permeate to all levels of staff, if it is to have lasting and practical impact. I’m confident it can be done, but it will indeed require transformation.”

These efforts to better understand the needs and challenges of individual technologies and designs seems to be paying off. As Dr. David Hill, Chief Technology Officer of Terrestrial Energy USA, has remarked, “Terrestrial Energy USA has been delighted with the amount of preparatory work the US NRC has done to ready itself to license the IMSR [Integrated Molten Salt Reactor] in the USA.”

Requesting Resources to Get the Job Done

In order to better understand and regulate innovative advanced reactor technologies, the NRC has focused on improving its understanding of new designs, materials, and technologies through extensive research and examination. Notably, in the NRC Fiscal Year 2019 Budget Justification, the Office of New Reactors requests an increase in its research budget from $8.9 million in Fiscal Year 2018 (annualized) to $15.1 million for Fiscal Year 2019.⁵ As NRC Chairman Svinicki emphasized in her 2018 Advanced Nuclear Summit statement, the Commission staff utilize the extensive resources of the National Labs to research and test the behavior of new technologies and materials under varying conditions to ensure a complete understanding of the characteristics.⁶ These experiments then allow NRC to engage with developers on better terms, ask the right questions, and create more effective processes for advanced reactor developers.  

The shift from rigid and infrequent interactions toward a more informed conversation with NRC staff is taking some of the guesswork and inefficiency out of the licensing process.

Adapting to keep up with Technology

The NRC’s capacity for flexibility in its regulatory approach can have a tremendous impact on advanced reactor companies’ investments and timelines. The ability and willingness of the NRC to become more adaptive is crucial to continued investment in the diverse array of advanced nuclear technologies under development in the U.S. Another concern for the advanced reactor industry is whether the NRC can create holistically different regulatory and licensing processes to accommodate advanced reactor technologies. The worry is that the NRC will fall back on standards and regulations created for the traditional LWR fleet—which are often inapplicable to more recent technologies—because of the misperception that adaptation and greater flexibility are simply not possible in a rigorous regulatory environment.

Recent moves by NRC, however, indicate the Commission’s willingness to evolve. In early 2018, for instance, NRC confirmed that, while all current plants are required to have a certain level of electric backup, the passive safety features of NuScale’s design allow its plant to safely operate without it.⁷ This is one of several important actions the NRC has taken to modernize its processes. Others include:

Evaluating Licenses Based on Technical Merits, Not a Standard Design: To more broadly address the licensing process for advanced reactors, the NRC published Draft Guidance 1353, “Technology-Inclusive, Risk-Informed, and Performance-Based Approach to Inform the Content of Applications for Licenses, Certifications, and Approvals for Non-Light-Water Reactors.” Draft Guidance 1353 (DG-1353) is an effort to introduce more flexibility into the regulatory structure. Under DG-1353, NRC considerations of advanced reactor technologies will progress based on risk-informing the technical merits of the design, not standards developed for more traditional reactor technologies. However, there is an emergent concern that the language in the guidance may still create undue burdens and penalize reactor designs with unique safety features. If worded properly, and with consideration to technology-inclusiveness, the guidance has the potential to have a positive impact on the regulatory process for advanced reactors. Several companies are engaging with NRC to further craft and test-out this guidance. Caroline Cochran from Oklo Inc. stated, “The guidance could fundamentally improve how reactors demonstrating inherent safety are approved and regulated.”

The ability and willingness of the NRC to become more adaptive is crucial to continued investment in the diverse array of advanced nuclear technologies under development in the U.S.

Maintaining Regular Communication with Developers: The Licensing Project Plan (LPP) has been a key planning tool for advanced reactor developers and NRC staff to ensure they maintain regular communication and adapt to minor challenges in the licensing process. The LPP helps outline the stages at which advanced reactor developers ought to meet with the NRC to submit necessary documents, confirm their progress, and communicate with Commission staff. The regularity of these meetings aids both sides by enabling the NRC to plan effectively and respond promptly to concerns or challenges. For developers, having consistent meetings to discuss expectations and next steps allows them to keep more detailed and accurate budget projections, which is particularly helpful when approaching investors.

Making NRC Staffing Practices More Efficient: Another positive development that has introduced greater regulatory predictability and efficiency into the licensing process is the core team approach. Some developers have expressed concerns about the efficiency of NRC staffing practices—it’s often unclear to them how many and which NRC staffers will be at each meeting and whether or not they will be familiar with previous discussions that the developer has already had with other staff members. To address this, NRC has been testing the use of a core team, which consists of nine technical officials and one legal official that are assigned to an applicant. The core team shows up to every meeting between the NRC and the advanced reactor developer, which allows for consistency in the discussion and stability in the overall process. Both advanced reactor industry stakeholders and developers have lauded the core team approach. NRC first implemented the core team approach during its pre-application interactions with Oklo Inc. When asked about the impact of the core team, Oklo Inc. remarked that it has been incredibly beneficial, in combination with the LPP, for planning and progress on pre-application topics. A similar sentiment came from X-energy founder and CEO, Dr. Kam Ghaffarian, who stated, “Our NRC relationship has been highly positive to-date and the NRO [NRC Office of New Reactors] core team is ready to support our regulatory needs.”⁸

Caroline Cochran from Oklo Inc. stated, “The guidance could fundamentally improve how reactors demonstrating inherent safety are approved and regulated.”

Other Positive Indicators: NRC leadership is working to implement three rules that would improve the regulatory process for the advanced reactor industry:

• Alternative Physical Security Requirements for Advanced Reactors: This draft rule would establish alternative physical security requirements for advanced reactors, since they do not necessarily face the same physical threats as the traditional fleet, and developers are increasingly addressing security at the design phase.⁹
• Incorporation of Lessons Learned from New Reactor Licensing Process: This draft rule would incorporate many of the more flexible, technology-inclusive practices and assessment strategies that have emerged during interactions with advanced reactor developers.¹⁰
• Emergency Preparedness Requirements for Small Modular Reactors and Other New Technologies: This proposed rule would make the size of the Emergency Planning Zone (the safety perimeter around a nuclear plant) proportionate to the risks posed by the reactors. This would mean that a plant using reactors that are smaller or have enhanced safety design features wouldn’t have the same requirements as today’s larger plants, which could affect a larger area.¹¹

When asked about the impact of the core team, Oklo Inc. remarked that it has been incredibly beneficial, in combination with the LPP, for planning and progress on pre-application topics.

Conclusion

Through its transformative and collaborative efforts, the NRC is becoming more transparent, communicative, and flexible in its approach to the regulatory process and interactions with advanced reactor developers. Advanced reactor industry stakeholders are engaged with the Commission, and have acknowledged its willingness to adapt and innovate in its procedures. Although further adjustments are necessary, the NRC has endeavored to ensure its efforts to accommodate advanced reactor technologies in the regulatory process are feasible, effective, and holistic.