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By 2025, the United States will need an estimated 55 percent more electricity. As consumption increases, utilities are searching for ways to increase production. A serious option is the construction of new nuclear power plants. No fewer than nine companies and consortia are preparing combined operating-license applications for more than 20 new reactors. Those applications are expected to go to the Nuclear Regulatory Commission between 2007 and 2009 for review and approval. The predictability, efficiency, and speed of the commission’s licensing are key to the success of the new ventures. Fortunately, an efficient NRC licensing process is feasible. A good example is the licensing proceeding for the National Enrichment Facility, a new commercial uranium-enrichment facility that Louisiana Energy Services intends to build in southeastern New Mexico. Our law firm represents Louisiana Energy Services in the NRC proceedings, and this experience offers general lessons for how future proceedings can work successfully for other companies. A NUCLEAR RENAISSANCE The phrase “nuclear renaissance” has entered the popular lexicon — and for good reason. Although the nation’s 103 operating reactors provide 20 percent of our electricity supply, no new nuclear plants have been ordered since the 1970s. The heightened political and regulatory oversight that followed the 1979 accident at Three Mile Island caused massive delays and cost overruns in plant licensing, thereby scuttling any plans for new reactors. The total time required to obtain a construction permit and operating license often was 10-15 years, if not longer. As a result, plant capital costs escalated to billions of dollars. NRC hearings, such as those held for the Shoreham and Seabrook plants, were often protracted and bitterly divisive. The past 25 years, however, have seen significant change in the nuclear power industry. Since Three Mile Island, the industry’s operational safety and performance records have become exemplary. The average capacity factor (a measurement of actual energy production relative to total possible production) for nuclear plants has increased from less than 60 percent in 1980 to about 90 percent today, the best among all power sources. Only hydroelectric plants have lower production costs. The renewed interest in plant construction also reflects the recent confluence of other political, economic, and regulatory factors. These include concern over national energy security, increasing fossil-fuel costs, the need for emission-free energy sources, market deregulation, more-favorable economic conditions (e.g., lower interest and inflation rates), and regulatory reform. The groundswell of public support for new nuclear construction is manifest at all levels. President George W. Bush, who recently visited the Calvert Cliffs and Limerick nuclear power plants, cited the need to invest in new nuclear infrastructure in his State of the Union address. The Energy Policy Act of 2005 provides numerous investment incentives for new plant construction. And the Nuclear Energy Institute reports that 76 percent of Americans living near nuclear power plants welcome the construction of new reactors in their communities. LICENSING DELAYS Nevertheless, concern exists about whether the NRC’s untested licensing process for new reactors will be disciplined and predictable. Corporate decision-makers and Wall Street analysts will need assurance that any new nuclear plants could be licensed efficiently. Unfortunately, recent proceedings with other major nuclear facilities demonstrate the potential for undue delay. When Louisiana Energy Services first sought to license a uranium-enrichment facility in 1991, for example, it ultimately withdrew its license application after seven years of administrative litigation. Similarly, the Private Fuel Storage consortium recently received a license to build and operate a spent-fuel storage facility in Utah, but only after nine years of proceedings. Already the NRC has taken steps to reduce regulatory uncertainty. Those steps include early site permits, reactor-design certification, and implementation of the new combined operating-licensing framework, whereby an applicant can seek a combined permit for both construction and operation. The commission also has streamlined its adjudicatory process for resolving challenges to license applications, and it has formally encouraged expedited staff review of applications and better case-management practices. Against this backdrop, some important lessons can be gleaned from the licensing experience under way for the National Enrichment Facility. These lessons have broad relevance to the nuclear power industry because of the similarities between the commission’s licensing processes for new enrichment facilities and for new nuclear power plants. In both cases, the NRC is asked to issue a single license that authorizes facility construction and operation. In both cases, mandatory initial disclosures are central to discovery. And in both cases, the applicant must go through a mandatory hearing, irrespective of any outside challenges to the application, to ensure that the license application contains sufficient information and that the government’s review has been adequate. Of great significance is how quickly the process was completed in this case: The NRC established a rapid schedule at the outset of the proceedings, and now the commission is on track to complete the National Enrichment Facility licensing process in an unprecedented 30 months. Louisiana Energy Services submitted a license application in December 2003, and it expects to receive its license in June 2006. This relative speed is especially noteworthy because this proceeding has involved the resolution of numerous contentions filed by two New Mexico state agencies and two anti-nuclear groups. In the past, dealing with these types of objections could have caused significant delays, but in this case, the commission is pushing the matter through to a rapid resolution. WHAT’S WORKING Several factors contributed to the expeditious conduct of this proceeding. One factor was early identification and resolution of key policy issues by the agency. Before submitting its license application, Louisiana Energy Services sought clarification of the government’s position on a number of issues that had spawned extensive litigation during the company’s previous license-application process. In its February 2004 hearing order for the National Enrichment Facility proceeding, the commission included explicit guidance on issues such as the disposition of depleted-uranium byproduct from facility operations, applicant financial qualifications, and foreign ownership of the facility. This guidance served to focus both the technical staff’s review of the application and the licensing board’s disposition of contentions. Another crucial factor was the commission’s clearly stated expectation — again in the hearing order — for “prompt and efficient resolution of contested issues” and elimination of “unnecessary delays in the NRC’s review and hearing process.” The commission established a firm 30-month schedule, with detailed milestones, for completing the proceeding. The commission set forth specific time frames for discovery, summary disposition, evidentiary hearings, and key licensing-board decisions. The commission also directed the licensing board, the NRC’s trier of fact, to decide threshold issues expeditiously and to certify to the NRC policy-setting commission novel legal or policy issues that would benefit from early commission consideration. In several instances, the certification process helped focus the scope of litigable issues. The commission also directed the licensing board to allow discovery and evidentiary hearings on safety and certain environmental issues before the commission staff issued its safety-evaluation report and final environmental-impact statement. As a result, discovery on the contested proceeding’s central issue — the company’s strategy and associated cost-estimate for disposing of depleted uranium — was largely completed before the NRC issued its safety-evaluation report. Four key environmental issues were also litigated on the basis of environmental reports. To its credit, the NRC completed its reports on schedule, but the early litigation of environmental contentions still expedited the proceeding. Holding hearings on contested environmental and safety issues as soon as practicable — even before issuance of the final staff review documents — avoided delay from “back-loading” of issues. Active commission and congressional oversight also helped to ensure agency adherence to the 30-month schedule. In its hearing order, the commission directed the licensing board to inform the commission promptly of any potential to miss a milestone by more than 30 days, the cause of the delay, and any potential mitigating actions. At several points, agency officials also appeared before Congress to report on the status of the National Enrichment Facility proceeding. This oversight certainly facilitated agency compliance with the schedule. AN EFFECTIVE GATEKEEPER Finally, the licensing board minimized delay by acting as an effective gatekeeper. The principal intervenors opposed to the facility, the Nuclear Information and Resource Service and Public Citizen, sought to introduce a slew of inadmissible issues, many of an ideological stripe. For example, the intervenors raised issues relating to the market impacts of the National Enrichment Facility, nuclear proliferation, management integrity, and the viability of state licensing determinations. Had they been admitted, such issues would have taken the proceeding on a lengthy detour. Disputes over the admissibility of such issues precipitated flurries of motions on which the licensing board promptly ruled. Similar adjudicatory discipline will be essential to managing the scope of any litigation on future reactor applications. As the Louisiana Energy Services proceeding demonstrates, certainty and efficiency in the NRC hearing process is achievable. Early commission resolution of threshold policy issues, binding schedule milestones, timely licensing reviews, well-defined contentions, efficient discovery, front-loaded resolution of contested issues, and active commission and congressional oversight throughout the entire process are imperative. Applying the lessons of the National Enrichment Facility experience to the licensing of new nuclear plants should result in efficiency and discipline in the process for combined operating licenses. On the basis of the Louisiana Energy Services experience, it is clear that licensing proceedings for new nuclear power plants can be approached in a similarly disciplined and predictable manner. Indeed, assuming high-quality applications for new nuclear plants, the NRC should be able to complete its review of such applications within a 30-month time frame. That would go a long way to provide confidence that the regulatory process can function in a disciplined and efficient manner, and it would thus encourage utilities to build new nuclear plants to provide needed electricity.
James R. Curtiss, a partner in the D.C. office of Winston & Strawn, is chair of the firm’s energy group. He is a former commissioner of the Nuclear Regulatory Commission. Martin J. O’Neill, an associate in firm’s D.C. office, also works in the firm’s energy group.

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