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Bipartisan legislation aims to boost nuclear power research

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A bipartisan group of nine senators has introduced a bill that aims to support the U.S. nuclear power industry by providing incentives for innovation and research.

The main thrust of the Nuclear Energy Leadership Act is to re-establish America’s leadership in nuclear energy.

Among other things, the bill, S. 3422, would extend the term of federal power purchase agreements to 40 years from the current 10-year limit and establish a pilot program for power purchase agreements of longer than 10 years.

The pilot program would give preference to “first-of-a-kind or early deployment nuclear technologies” especially in remote areas or to technologies capable of “islanding” or operating independently of the grid.

The bill calls for the Secretary of Energy to consult with other federal departments and agencies, particularly the Department of Defense and the Department of Homeland Security to enter into a long-term PPA for an advanced nuclear facility no later than Dec. 31, 2023. The bill would also authorize the Secretary to pay a rate in the PPA that is “higher than the average market rate.”

The PPA provisions of the bill would not apply to existing or under construction nuclear reactors because they are not advanced, but they could apply to a small modular reactor that is under development.

In April, the Nuclear Regulatory Commission completed the first phase of design certification, the first step in any nuclear project, for NuScale Power’s small modular reactor, which uses first-of-kind safety measures such as not requiring emergency backup generators, among other things.

Utah Associated Municipal Power Systems would be NuScale’s first customer. In 2016, UAMPS identified a preferred site at the Idaho National Laboratory for a 12 reactor project NuScale is working on with the public power utility.

If S. 3422 does become law, it could be “immediately impactful for NuScale,” which is looking to deploy its first series of small reactors in 2026, Chris Colbert, the company’s chief strategy officer, said.

Developers of any type of generation project are always looking for long term PPAs that match the term of their debt agreements. That is particularly true with capital intensive technologies, such as nuclear power.

A long-term PPA would not directly benefit UAMPS, but it could indirectly benefit UAMPS in its pursuit of its SMR project, according to Colbert. Several of UAMPS’ member distribution utilities have federal agencies, such as the Idaho National Laboratory of the Los Alamos National Laboratory, that could be eligible for a PPA under the bill. Being able to count on a long-term federal PPA could help UAMPS sign up more of its members to participate in the project, Colbert said.

Another five sections of the bill apply to measures that would encourage and support research on advanced nuclear technologies by fostering public private partnerships and, in particular, promoting research and development for fast-neutron reactors and high-assay low-enriched uranium (HALEU) technology. Existing U.S. rectors do not use either technology, nor does NuScale’s technology.

Currently, the only machines capable of fast neutron technology are in Russia and China. The bill directs the Department of Energy to build a fast neutron-capable research facility, a crucial first step in licensing an advanced reactor.

Similarly, existing U.S. reactor designs, including NuScale’s, do not use high assay fuel, which can be as much as 25% enriched uranium. Most U.S. commercial reactors use fuel with about 5% enriched uranium. But the U.S. Navy’s nuclear submarines use high assay fuel, and the bill aims to release some of that spent fuel for research purposes.

The Senate’s nuclear bill has a good chance of becoming law, Jane Accomando, a partner elect, at Morgan, Lewis & Bockius, said. But the bill is mostly about research and few of its provisions would have an immediate commercial impact on existing or planned nuclear projects.

Colbert said NuScale is supportive of the bill, which he called a “first step” toward reviving the nation’s nuclear industry. “Directionally, it sends a strong signal,” he said.

The Republican senators who introduced the bill are Lisa Murkowski of Alaska, chairman of the Senate Energy and Natural Resources Committee, James Risch and Mike Crapo of Idaho, and Shelley Moore Capito of West Virginia. The Democratic senators who introduced the bill are Cory Booker of New Jersey, Richard Durbin of Illinois, Joe Manchin of West Virginia, Sheldon Whitehouse of Rhode Island, and Chris Coons of Delaware.

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