ADVANCE Act’s comprehensive nuclear legislation shows progress on the Hill

The “Accelerating Deployment of Versatile, Advanced Nuclear for Clean Energy Act”—or ADVANCE Act— saw a lot of movement on the Hill this past week.  Notably, on May 8, 2024, the House passed the Fire Grants and Safety Act (S. 870), by a vote of 393-13, which contained the reconciled and latest version of the ADVANCE Act.  The ADVANCE Act now goes back to the Senate for a vote where it can be “fast-tracked” for final approval.  Despite the Senate’s attempt to pass a parallel ADVANCE Act as an amendment to the Federal Aviation Administration (“FAA”) Reauthorization Act of 2024, on May 9, the nuclear package was ultimately excluded from the final bill.  Therefore, the Fire Grants and Safety Act, sponsored by Sen. Gary Peters (D-Mich.), which first passed the Senate last year, offers what lawmakers and nuclear energy advocates believed would be a strong vehicle to shepherd the bipartisan ADVANCE Act into law.

In passing S. 870 with the reconciled ADVANCE Act, Chair Jeff Duncan of the House Energy, Climate, and Grid Security Subcommittee issued the following statement: “Today’s vote by the House sends the largest update in nuclear energy policy in decades back to the Senate for ratification before it goes to the President’s desk. This legislation brings us one step closer to energy independence and being prepared for our coming nuclear renaissance.”

The general purpose of the ADVANCE Act is to support the deployment of U.S. advanced reactors both domestically and overseas.  It includes a number of provisions aimed at the U.S. Nuclear Regulatory Commission’s (“NRC” or “Commission”) licensing process; strengthening the workforce at the NRC; and updating the NRC’s export authority and processes.  The Act would also amend the Atomic Energy Act to ensure fusion facilities continue to be regulated under a radioactive materials licensing framework, which aligns with an earlier NRC determination. 

We provide details on the latest version of the ADVANCE Act below.

Key provisions of the ADVANCE Act

We previously covered the provisions of the Senate’s version of the ADVANCE Act in a prior blog post.  The new reconciled bill includes modifications and additions incorporated from the House bill as well as a few omissions discussed below.

The reconciled ADVANCE Act has three major bins of provisions: (1) support for new reactors, (2) international engagement and deployment, and (3) NRC streamlining.  Key provisions of the reconciled ADVANCE Act include the following:

(1) Support for New Reactors

• Fees for advanced nuclear reactor application review:  This section amends the Nuclear Energy Innovation and Modernization Act (“NEIMA”) to set a specific reimbursement rate for NRC advanced nuclear reactor applications.  The rate equals the hourly rate calculated by the Commission for mission-direct program salaries and benefits for the nuclear reactor safety program.  Mission-indirect program support and agency support expenses that would otherwise be charged to the applicant are excluded from the NRC fee base—meaning those costs will not be passed on to applicants.  Sec. 201.
• Enabling preparation for the demonstrations of advanced nuclear reactors on DOE sites or critical national security infrastructure:  This section removes from the NRC fee base the costs associated with pre-application activities and review of early site permits on Department of Energy sites or critical national security infrastructure.  Sec. 204.
• Development, qualification, and licensing of advanced nuclear fuel concepts:  This section directs the Commission to establish an initiative to enhance preparedness and coordination to qualify and license advanced nuclear fuel.  Sec. 404.
• Regulatory requirements for micro-reactors:  Within 18 months of the enactment of the Act, the NRC must develop risk-informed and performance based strategies and guidance to license and regulate micro-reactors, including strategies and guidance for (1) staffing and operations; (2) oversight and inspections; (3) safeguards and securities (4) emergency preparedness; (5) risk analysis methods, including alternatives to probabilistic risk assessments; (6) decommissioning funding assurance methods that permit the use of design- and site- specific cost estimates; (7) transportation of fueled micro-reactors; and (8) siting, including in relation to the population density, mobile deployment, and environmental reviews.  Sec. 208.
• Advanced nuclear reactor prizes:  This section amends NEIMA to authorize the Secretary of Energy to award a financial prize to eligible entities to which the Commission issues an operating license for an advanced nuclear reactor under 10 CFR Part 50 or 52.  Awards may be made for:  

1. The first advanced nuclear reactor for which the NRC issues a license;
2. An advanced reactor that uses isotopes derived from spent nuclear fuel or depleted uranium as fuel and is the first advanced nuclear reactor that the NRC issues a license;
3. An advanced reactor that is a nuclear integrated energy system composed of two or more co-located or jointly operated subsystems of energy generation, energy storage, or other technologies, in which not fewer than 1 subsystem is a nuclear energy system and the purpose is to reduce greenhouse gas emissions in both the power and the nonpower sectors, and to maximized energy production and efficiency;
4. An advanced reactor that operates flexibly to generate electricity or higher temperature process heat for nonelectric applications and is the first advanced reactor for the NRC to issue a license; or
5. The first advanced reactor for which the NRC grants approval to load nuclear fuel pursuant to the technology-inclusive regulatory framework.

For all of the above categories, the awardee must be the first advanced reactor in its category to be licensed by the Commission in order to receive the award.  Sec. 202.

• Report on advanced methods of manufacturing and construction for nuclear energy projects:  This section provides that within 180 days of the enactment of the Act, the NRC must submit to Congress a report on manufacturing and construction for nuclear energy projects.  The report shall include cost estimates, proposed budgets, and proposed timeframes for implementing risk-informed and performance-based regulatory guidance for advanced manufacturing and construction for nuclear energy projects.  Sec. 401.

(2) International Engagement and Deployment

• Foreign ownership:  This section generally provides that the prohibitions against issuing reactor licenses to certain foreign corporations and other entities described in sections 103d. and 104d. of the Atomic Energy Act of 1954 shall not apply to an entity that is foreign and owned, controlled, or dominated by (1) the government of a country that is a member of the Organization of Economic Cooperation and Development, or the Republic of India; (2) a corporation that is incorporated in one of those countries; or (3) a citizen or national of one of those countries.  There are exclusions for countries where any department, agency, or instrumentality of the government is subject to sanctions under section 231 of the Countering America’s Adversaries Through Sanctions Act or any citizen national or entity included in the List of Specially Designated Nationals and Blocked Persons maintained by OFAC, and the NRC still needs to make a determination that issuing the license is not inimical to the common defense and security or the health and safety of the public.  Sec. 301.  We have long advocated that Congress amend the foreign ownership restriction in the Atomic Energy Act.   
• Export and innovation activities:  This section provides that the Commission is required to coordinate all work of the Commission relating to (1) nuclear reactor import and export licensing and international regulatory cooperation; and (2) international regulatory coordination with respect to:
  • The consideration of international technical standards to establish the licensing and regulatory basis to assist the design, construction, and operation of nuclear reactors and use of radioactive materials,
  • Efforts to help build competent nuclear regulatory organizations and legal frameworks in countries seeking to develop civil nuclear industries, and
  • Exchange programs and training, in coordination with the Secretary of State, foreign countries relating to civil nuclear licensing and oversight to improve the regulation of nuclear reactors and radioactive materials.

Additionally, the Commission is authorized to establish the International Nuclear Reactor Export and Innovation Branch within the NRC’s Office of International Programs.  The activities under this section are excluded from the NRC fee base.  Sec. 101. 

• Export license notification:  This section provides additional export restrictions on certain types of nuclear exports to certain countries.  Sec. 103.
  • If the Commission issues to certain countries an export license for the transfer of (1) unirradiated nuclear fuel containing special nuclear material, excluding low-enriched uranium; (2) a nuclear reactor that uses such unirradiated nuclear fuel; and (3) certain plants or components listed in Appendix I of 10 CFR Part 110; then the Commission must inform Congress of the export license. 
  • This notification requirement applies to an export license issued to any country that has not concluded and ratified the Additional Protocol to its safeguards agreement with the International Atomic Energy Agency, or that has not ratified or acceded to the amendment to the Convention of the Physical Protection of Nuclear Material.
• Part 810 generally authorized destinations: Under this section, the Secretaries of Energy and State must evaluate the factors used to grant generally authorized status under 10 C.F.R. Part 810.  The Secretary of Energy must update its process for determining generally authorized status and revisit the list of generally authorized countries in Appendix A every five years.  This section comes from the House companion bill.  Sec. 105.

(3) NRC Streamlining

• NRC mission alignment:  Under this section, within one year after the date of enactment of the Act, and while remaining consistent with the policies in the Atomic Energy Act of 1954 (as amended), the Commission must update its mission statement to include that licensing and regulation of nuclear energy activities be conducted in a manner that does not unnecessarily limit “the benefits of nuclear energy technology to society.”   Sec. 501.  This provision comes from the House bill; the language is less aggressive than that proposed by the House but has still faced concern from nuclear energy watchdogs. 
• Strengthening the NRC workforce:  This section authorizes the Chairman of the Commission to appoint, without regard to the civil service laws, up to 120 exceptionally well-qualified individuals into the excepted service at any given time, and up to 20 exceptionally well-qualified individuals into term-limited positions in any fiscal year.  The Commission may determine the compensation for these merit-based positions without regard to General Schedule classification or pay rates, although the annual salary may not exceed the annual rate of salary payable for level III of the Executive Schedule under 5 U.S.C. 5314.  Additionally, the Commission may provide a hiring bonus and/or a performance bonus to an employee who demonstrates exceptional performance.  Sec. 502.
• Regulatory issues for nuclear facilities at brownfield sites:  This section directs the Commission to identify and report on regulations, guidance, or policy necessary to license and oversee nuclear facilities at brownfield sites, including sites with retired fossil fuel facilities.  Within 14 months after the date of enactment of the Act, the Commission must submit to Congress a report describing its findings.  Within two years after the date of enactment of the Act, the Commission must develop and implement strategies to enable timely licensing reviews for, and to support oversight of, reactors at brownfield sites, or initiate a rulemaking to meet the same goals.  Sec. 206.

Other key provisions include the following:

• Fusion Energy Regulation: The Act amends the Atomic Energy Act to clearly differentiate fission and fusion regulation.  In this section, an updated definition of “fusion machine” is inserted into the Atomic Energy Act of 1954 and the Nuclear Energy Innovation and Modernization Act, the latter of which originally included fusion energy as a type of advanced reactor.  These changes designate fusion as creating “byproduct material,” thereby separating fusion machines from advanced nuclear reactors—and the attached licensing consequences.  Additionally, the Commission must report to Congress on its fusion licensing framework within one year of the date of enactment of the Act.  Sec. 205.
• Biennial Report on the Spent Nuclear Fuel and High-Level Radioactive Waste Inventory in the United States:   This section provides that not later than January 1, 2026, and biennially thereafter, the Secretary of Energy shall submit a report to Congress that describes:
  • The annual and cumulative amount of payments made by the United States to the holder of a standard contract due to a partial breach of the Nuclear Waste Policy Act of 1982, resulting in financial damages to the holder;
  • The cumulative amount spent by the Department of Energy since fiscal year 2008 to reduce future payments projected to be made by the United States to any holder of a standard contract due to a partial breach of the Nuclear Waste Policy Act of 1982;
  • The cumulative amount spent by the Department of Energy to store, manage, and dispose of spent nuclear fuel and high-level radioactive waste in the United States as of the date of the report;
  • The projected lifecycle costs to store, manage, transport, and dispose of the projected inventory of such spent nuclear fuel and high-level radioactive waste, including that to be generated from existing reactors through 2050;
  • Any accounting mechanisms or recommendations for improving accounting to better account for spent nuclear fuel and high-level radioactive waste costs and liabilities; and
  • Any actions taken in the previous fiscal year by the Department of Energy (1) with respect to interim storage and (2) to develop and deploy nuclear technologies and fuels that enhance the safe transportation or storage of spent nuclear fuel or high-level radioactive waste.  Sec. 403.
• Technical Correction: The Act amends the Atomic Energy Act to fix a technical error in the definition of “research and test reactor” introduced by NEIMA.  Congress has long been trying to correct this error.  The ADVANCE Act permits the Commission to issue a license under Section 104c. of the Atomic Energy Act if not more than 75 percent of the annual costs of owning and operating the facility are devoted to the sale, other than for research and development or education and training, of (1) nonenergy services, (2) energy, or (3) a combination of nonenergy services and energy; and if not more than 50 percent of the annual costs of owning and operating the facility are devoted to the sale of energy.  Sec. 601.

For close readers of the individual Senate version of the bill, the reconciled ADVANCE Act in S.870 omits a few notable provisions from the original version.  For example, the Senate ADVANCE Act from 2023 included a Price Anderson Act extension and a provision to reduce reliance on Russian uranium.  In both cases, Congress has already addressed these issues in recent legislation.  In March, Congress extended the expiration date of the Price Anderson Act to December 31, 2065 as part of a minibus appropriations bill.  In April, Congress banned the import of Russian uranium (discussed in more detail below).  The reconciled ADVANCE Act also does not include a previously-included $100 million authorization for EPA to clean up abandoned uranium mine sites on tribal land. 

For more information about the ADVANCE Act, see our previous blog posts covering this legislation.  

The continued battle for global dominance in advanced nuclear:

The ADVANCE Act aims to advance America’s energy and national security interests on a global stage.  Along that line, a few other recent developments have emerged in recent few weeks that highlight why legislative action in this space is so important—particularly, the Russian uranium ban and China’s announcement to move forward with a planned floating nuclear power plant project.

• Congress passes ban on Russian uranium.  On April 30, 2024, the U.S. Senate unanimously passed legislation banning the import of Russian uranium.   Specifically, the bill prohibits the import of unirradiated low-enriched uranium produced in the Russian Federation or by a Russian entity.  Low-enriched uranium is uranium with a less than 20% concentration of the isotope U-235.  This definition includes HALEU, which is enriched between 5% and 20% and is needed for most advanced nuclear reactor fuel.  The Secretary of Energy, in consultation with the Secretaries of State and Commerce, may waive the ban on Russian uranium if no alternative viable source is available to sustain operation of a U.S. nuclear reactor, or if the Secretary determines that such import is in the national interest.  The bill is expected to be signed by President Biden.  Note, U.S. nuclear power plants imported around 12% of their uranium from Russia in 2022, according to the U.S. Energy Information Administration.
• China developing floating nuclear reactors to power military facilities.  Last week, U.S. officials explained that China is moving forward with plans to develop floating nuclear reactors.  China has been developing such reactors for over a decade, and it is estimated their deployment is still several years away.  However, China plans to use such floating reactors to power bases in the South China Sea, a plan that could undermine regional security.  Russia also has an operational floating nuclear power plant.

We will continue to monitor the progress of the ADVANCE Act and related developments. 

For more information, please contact Amy Roma, Partner, Stephanie Fishman, Senior Associate, or Cameron Tarry Hughes, Associate.