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NRC proposes nuclear plant ownership rule changes that some say are too modest

TheU.S. Nuclear Regulatory Commission unveiled proposed changes to its enforcementof rules on the foreign ownership of nuclear power plants, but the revisions donot appear to address several claims that the status quo rules are outdated forthe 21st century.

Theproposed changes do not remove the NRC's effective ban on foreign companies owning a more than50% stake in a U.S. nuclear plant. That restriction, for example, blocked a U.S.-basedcompany owned by the mostly French government-controlled from getting a license for a planned third reactor at the nuclear plant in Maryland.

In2014, the NRC said itwould review its interpretation of a provision from the Atomic Energy Act of1954 that blocks licenses for nuclear facilities "owned or controlled by aforeign corporation or government," setting off speculation that the NRCcould relax its approach.

Ahearing the NRC heldon the matter in January 2015 included a lot of discussion suggesting that theprohibition on foreign ownership might not make sense in a post-Cold War worldand that it could be time to allow companies from countries thatdo not pose a national security threat to the U.S. to own nuclear power plantsindirectly through U.S. subsidiaries.

Buta draft plan released by the NRC on April 27 "will continue topresent an obstacle to major foreign investment into U.S. projects or even tosignificant foreign financing of those projects," said Winston &Strawn LLP attorney David Repka, who has represented , theEDF-owned venture.

"I understand that the NRC feels constrained by thecurrent law, and that legislation is needed to make significant change. Butthis draft seems to utilize very little of the latitude that might exist evenunder current law," Repka said.

According to an NRC spokesman, the draft represents the "onlyproposed changes" to the agency's guidance for staff conducting reviews offoreign ownership, control or domination. While the NRC will release a draftregulatory guide soon, "it will not have any different aspects of review,"the spokesman said.

The Nuclear Energy Institute, the main lobbying organizationfor the U.S. nuclear industry, has previously said the NRC should considerallowing up to 100% indirect foreign ownership.

NEI continues to analyze the draft plan, according to NEIVice President, General Counsel and Secretary Ellen Ginsberg. "We willsubmit detailed comments later in the month when they are due, but we continueto be concerned that a number of the issues we identified previously have notbeen satisfactorily addressed," she said. "As a general matter, therevised [Standard Review Plan] allows NRC staff reviewers to conduct seeminglywide-ranging reviews of information not in the application, and to basedecisions upon the 'totality of facts' with little restraint on the exercise ofthe reviewer's discretion." The draft revisions are open for publiccomment through May 27.

The stalled Calvert Cliffs 3 project had previously soughtNRC approval when ownership of the proposed reactor was split between EDF andU.S. company Constellation EnergyGroup Inc., which was later acquired by , the current owner of theexisting Calvert Cliffs plant along with EDF. But Constellation pulled out ofthe project in 2010 after deciding that it would have to pay too much to get afederal loan guarantee to help finance the reactor.

With EDF as its sole backer, UniStar tried to proceed withits license application by submitting a plan to minimize foreign involvement inthe operation of the plant. But the NRC found that this plan could not eraseconcerns about the "foreign ownership, control or domination" rulebecause EDF would still own 100% of the reactor, even if indirectly. The agencysaid, however, that it would reevaluate its application of the rule in light ofUniStar's request, a process that led to the recent draft.