The Nuclear Regulatory Commission (NRC) voted 4-1 on February 9 to issue Combined Operating Licenses (COL) for two new nuclear units at the Southern Company’s Vogtle site in Georgia. The two new reactors are the first to be approved since 1978. Their approval is the culmination of years of effort by the Federal government to reinvigorate the country’s nuclear industry. Environmental groups have promised to file a lawsuit challenging the permits.
A COL authorizes the licensee to construct and operate a nuclear power plant at a specific site. Seventeen COL applications are currently pending before the NRC, although four applicants have asked the NRC to suspend further consideration at this time. Most of the applicant projects are based in states whose laws and regulations guarantee recovery of the reactor’s multi-billion dollar construction cost in the sponsoring utility’s rate-base.
The NRC received the Vogtle application in March 2008, and the review process included assessments of environmental impacts, operational programs, and site safety. Like the new Vogtle reactors, nearly all of the proposed reactors in the U.S. are to be located at sites that already have at least one nuclear facility. Applicants hope that colocating reactors at existing sites will speed the approval processes.
The renewed interest in building nuclear reactors is partially due to the Department of Energy’s Nuclear Power 2010 program and the Energy Policy Act of 2005 (EPAct). Under the 2010 program, DOE provided funding for companies to submit COL applications. EPAct created a loan guarantee program, authorized a tax credit for nuclear electricity, funded research and development, and extended the Price-Anderson Act, which indemnifies the industry against damage claims arising from nuclear incidents. The owners of the new unit are benefitting from an $8.3 billion loan guarantee and may earn up to $250 million annually in federal tax credits if the reactors generate power by 2021. In addition, as the first licensee using an advanced reactor design, Vogtle can receive up to $500 million under EPAct to cover the cost of litigation or regulatory delays.
Environmental groups have already announced their intention to challenge the licenses. The Southern Alliance for Clean Energy (SACE) and eight other groups will claim that the Vogtle applicants must prepare a new environmental impact statement (EIS) that accounts for the lessons learned from the 2011 nuclear accident at Fukushima. The lawsuit will argue that the new EIS should include how the cooling systems and spent fuel storage pools will be designed to protect against floods, earthquakes and prolonged losses of power, as well as updated emergency plans for accidents affecting multiple reactors at the site. SACE is also involved in a Freedom of Information Act proceeding to obtain documents relating to the Vogtle loan guarantee.© 2013 McDermott Will & Emery