NINA falls foul of foreign ownership law

01 May 2013

Plans for two new reactors at the South Texas Project (STP) are facing a new hurdle after US regulators determined that licence applicant Nuclear Innovation North America (NINA) does not meet requirements on foreign ownership.

The US Nuclear Regulatory Commission (NRC) issued its determination as part of the proceedings of its review of revisions to NINA's application for a combined construction and operating licence (COL) for two ABWR reactors at the site. In a letter to NINA dated 29 April, the regulator told NINA that its staff had "determined that NINA and its wholly owned subsidiaries … continue to be under foreign ownership, control, or domination and do not meet the requirements … of the Atomic Energy Act or the requirements of 10 CFR 50.38." This refers to requirements of Title 10 of the Code of Federal Regulations, and stipulates that foreign corporations cannot be granted an operating licence for a US nuclear plant.

NINA was founded in 2008 by US utility NRG Energy in partnership with Japanese company Toshiba to promote the use of Toshiba's Advanced Boiling Water Reactor (ABWR) in North America. The COL application for two ABWRs at STP, where NRG Energy already operates two pressurized water reactors, had already been submitted to the NRC in 2007. However, in 2011 NRG Energy announced that it would be withdrawing from the project and writing down its $331 million investment in NINA. Since then, Toshiba has bankrolled the licensing process.

The NRC had previously notified NINA in late 2011 that the corporation did not meet the foreign ownership requirements and would therefore be ineligible to receive a licence; however NINA subsequently filed revisions to its COL application and a "negation action plan" to address the issue.

The NRC's newest determination finds that Japanese corporation Toshiba, through its US subsidiary Toshiba American Nuclear Energy Corporation (TANE), is the sole source of financing for NINA. Furthermore, the NRC says, this financial control is coupled with other considerations including TANE's ownership stake in NINA, its board representation, "multiple and interrelated" contractual arrangements with TANE, and TANE's authority to appoint NINA's chief financial officer. "The staff has found that, although TANE owns about 10 percent of NINA, its overwhelming financial contributions give it significantly more power than is reflected by this ownership stake. The staff has further found that the proposed negation action plan does not negate TANE's control and domination of NINA," the NRC concludes. 

Mark McBurnett, president of NINA, said that the company believed it met the rules for American ownership and looked forward to the NRC's decision being reviewed and ruled upon by the NRC Atomic Safety Licensing Board. "While this process continues, the NRC is continuing to move forward on the technical portion of the permit and other activities necessary to obtain the license. This action by NRC is a step in the process necessary to reach a final resolution of the foreign ownership issue," he said.

The NRC has notified NINA that it will continue to review the remaining portions of the COL application while the company "considers its options", but will not issue a licence until the foreign ownership requirements are met.

STP 3 and 4 are not the first US new-build projects to run into problems with overseas ownership issues. Unistar Nuclear Energy, which has applied for a COL for a new plant at Calvert Cliffs in Maryland, is now 100%-owned by EDF of France after its US partner Constellation Energy sold its holdings because of the financial burden of trying to secure federal loan guarantees. Earlier in 2013 the NRC upheld an earlier ruling that the project is precluded from obtaining a licence by virtue of the extent of EDF's involvement.

Researched and written
by World Nuclear News

Filed under: Plant licensing, New build, USA