The Nuclear Regulatory Commission (NRC) on Friday told Unistar Nuclear Energy it could not issue the company an operating license for its planned reactor at Calvert Cliffs in Maryland because it was fully owned by France’s Électricité de France (EDF)—a foreign entity.

In a letter to George Vanderheyden, president and CEO of UniStar Nuclear Energy, NRC Director of New Reactor Licensing David B. Matthews said that UniStar had asked the regulator to revise a combined construction and operation license (COL) to reflect that EDF had bought out Constellation Energy in the initial 50:50 UniStar joint venture in October 2010.

But the NRC found 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. In the letter dated April 6, the NRC said UniStar was owned 100% by a foreign corporation, pointing out that EDF was also 85% owned by the French government.

Despite’s UniStar’s revisions to the ownership and financial information in its application—including appointing a U.S. citizen as CEO to ensure U.S. control over relevant decisions as well as safety, security, and reliability matters (called a negation plan)—the NRC said it could not issue the COL.

“While UniStar considers its options to move forward, the review of the remaining portions of the COL application will continue in accordance with the schedule provided to UniStar,” the NRC said. “In addition, the NRC will continue to finalize the final environmental impact statement as discussed. … However, a license will not be issued unless the requirements of 10 CFR 50.38 are met.”

“As we have consistently stated, Calvert Cliffs 3 will ultimately have a U.S. partner,” EDF said in a statement. “While EDF and UniStar disagree with the Nuclear Regulatory Commission’s conclusion regarding UniStar’s present governance structure, we are pleased that the NRC will continue to review all other aspects of our pending application.”

Constellation and EDF submitted the application for the EPR project in 2007. EDF bought out its partner last year after Constellation said it could no longer participate in the project without federal loan guarantees. The Baltimore-based company withdrew its loan guarantee application from the Energy Department because it said proposed terms and conditions of the guarantee were “unworkable” and the cost of the loan as calculated by the Office of Management and Budget was “unreasonably burdensome.”

Sources: POWERnews, NRC, EDF, UniStar