A panel of judges on the Nuclear Regulatory Commission’s (NRC’s) Atomic Safety and Licensing Board last week denied a construction and operating license (COL) for a new reactor proposed at the Calvert Cliffs Nuclear Plant in Maryland by Unistar, ruling that applicant Électricité de France (EDF) was completely “foreign-owned.” The decision could have implications for two proposed reactors in Texas, which are partly owned by Toshiba America.

When Unistar submitted its COL application for the reactor in 2007, the company was a joint venture between Maryland-based Constellation and French company EDF, the judges noted in a 29-page ruling. The board ruled that UniStar has 60 days to provide proof of progress towards a partnership with a U.S. company that meets the NRC’s requirements. “Without that proof, the judges will end the hearing,” the NRC said in a statement. “After 60 days, UniStar would have to fulfill additional requirements to re-start the hearing if they found a U.S. partner.” The ruling can be appealed to the NRC’s five commissioners, the decision said.

Calvert Cliffs Unit would have been the site of the first AREVA EPR reactor in the U.S. In October 2010, EDF, a French limited company, acquired Constellation Energy’s 50% share in Unistar for $140 million, giving EDF full ownership. Just months before that deal, Constellation Energy made headlines when it shunned a $7.5 billion conditional loan guarantee offer from the U.S. Department of Energy to build the new reactor at Calvert Cliffs with partner EDF, saying the government’s proposed terms and conditions were “unworkable.” Constellation Energy merged with Exelon Corp. earlier this year.

The NRC in April 2011 had warned Unistar that it could not issue the company a COL because it was fully owned by a foreign entity after Unistar asked the regulator to revise the COL to reflect that EDF had bought out Constellation in October 2010. The NRC found—as did the regulator’s Atomic Safety and Licensing Board panel of judges on Aug. 30—that UniStar’s application did not meet requirements of federal regulation 10 CFR 50.38, which prohibits granting of a nuclear plant operating license (COL) to foreign corporations.

Board hearings are one part of the NRC’s process for determining whether a new reactor can be approved. Environmental and citizen groups Public Citizen, Southern Maryland Cares, Beyond Nuclear, and the Nuclear Information Resource Service (NIRS) had intervened in the case, arguing that the project would be “owned, dominated and controlled by foreign interests,” which is contrary to the Atomic Energy Act.

On Aug. 30, the board also examined but threw out a challenge to the NRC’s environmental review that alleged it failed to properly account for possible increases in solar and wind power as an alternative to a new reactor. “The judges said that argument was correct when the hearing started, but all the information considered during the hearing corrected the agency’s error. The judges ruled the environmental review as it exists today is acceptable,” the NRC said.

Groups opposed to the new reactor had also argued that the Calvert Cliffs environmental review would be incomplete until the NRC considered information from the agency’s Fukushima task force report, including possible improvements for dealing with reactor accidents. The judges ruled that, while the groups filed their argument within the time allowed by the NRC’s rules, the board was required to abide by a March 16, 2012, decision from the NRC’s five commissioners. That decision rejected a similar argument in other hearings, concluding the argument failed to point out how Fukushima’s events directly related to the applications under review.

"From a regulatory perspective, the Calvert Cliffs decision shows that the prohibition against foreign ownership means what it says. This could be a major setback to the nuclear industry if foreign capital is unavailable for U.S. nuclear projects,” said Robert Eye, attorney for the SEED Coalition, a group which has intervened in the licensing process for the two-reactor expansion of the South Texas Project outside Bay City, Texas. "Domestic investors and lenders won’t put their money in nuclear projects without massive government subsidies and loan guarantees. Considering tight budgets, more government money for dangerous and expensive nuclear power doesn’t make sense when cheaper and safer renewable sources are available."

Toshiba North America Engineering (TANE) is expected to assume exclusive, principal funding authority for the Texas project, but they are a wholly owned subsidiary of Toshiba America, a Japanese corporation, opponents contend. "Foreign investment in U.S. nuclear projects is not per se prohibited; but Toshiba is paying all the bills for the STP 3 & 4 project. This makes it difficult to accept that Toshiba doesn’t control the project," said Eye.

New Jersey–based NRG Energy, the majority owner and operator of the South Texas Project, in April 2011 pulled its financial support for a multibillion-dollar project to build two new advanced boiler water reactors (ABWRs) at its nuclear plant in Matagorda County, Texas, because the  Japanese nuclear crisis had “diminished prospects” for that project. NRG’s withdrawal meant that Toshiba would be responsible for costs to continue the NRC licensing process. NRG holds an 88% share of NINA, while Toshiba holds the remaining 12%.

Sources: POWERnews, NRC, SEED

—Sonal Patel, Senior Writer (@POWERmagazine)