Ownership issues block Unistar licence

31 August 2012

Unistar Nuclear Energy is ineligible to obtain a licence to construct a new nuclear power plant at Calvert Cliffs as it remains wholly-owned by a foreign corporation, a licensing board of the US nuclear regulator has ruled. Owner EDF of France has been given 60 days to show progress in its search for a US partner for the project.

Unistar, originally a 50:50 joint venture between EDF and Constellation Energy, applied in July 2007 to build a French-designed EPR reactor at the Calvert Cliffs site in Maryland where Constellation already operates two existing pressurized water reactors. However, EDF took 100% control of Unistar Nuclear Energy when it bought out its erstwhile partner in October 2010 after the financial burden of securing federal loan guarantees put the project beyond Constellation's commercial reach. Constellation has subsequently merged with Exelon.

"The licence cannot be granted as long as the current ownership arrangement is in effect."

NRC Atomic Safety Licensing Board

With Unistar fully-owned by EDF, several environmental groups contended to the US Nuclear Regulatory Commission (NRC) that Calvert Cliffs unit 3 would be "owned, dominated and controlled by foreign interests," contrary to the 1954 Atomic Energy Act. They claim that EDF's ownership of Unistar renders it ineligible to receive - or even to apply for - a licence.

US federal regulation 10 CFR 50.38 prohibits the granting of a nuclear plant operating licence to foreign corporations. Unistar has made various revisions to the ownership and financial information in its combined construction and operation licence (COL) application for the plant, including what it called a negation plan which would see the company appoint a US citizen as CEO to assure US control over relevant matters, and various subcommittees of US citizens to ensure US control over safety, security and reliability matters. However, the NRC had previously told Unistar that its application still failed to meet the requirements of 10 CFR 50.38, but has continued its review of the remaining portions of the COL application while a US partner was sought.

A three-judge NRC Atomic Safety Licensing Board (ASLB) has now ruled in favour of the interveners, saying: "The licence cannot be granted as long as the current ownership arrangement is in effect." It noted, "Applicants have had roughly two years to remedy the foreign ownership problem. We do not doubt that applicants have made substantial efforts to find US partners, but they have thus so far been unable to provide evidence to the board indicating that a deal with an acceptable US partner is imminent."

The ASLB added, "Given the apparent lack of progress in finding potential US partners, the amount of time that has elapsed since applicants became 100% foreign owned, and the current economic climate, we are not willing to grant applicants an indefinite amount of time to resolve this deficiency because doing so would be counter to the commission's policies and regulations."

However, the board has granted Unistar 60 more days to find a US partner that would help it meet the foreign ownership restrictions. The ASLB noted, "Although 60 days may seem a short period of time in which to obtain a domestic partner for Calvert Cliffs unit 3, applicants have already had nearly two years to find such a partner. If after 60 days applicants have not notified the board of such a change in ownership situation, this proceeding will be closed. If, alternatively, applicants manage to find a domestic partner, and provide information to the board that an agreement has been or will be in the immediate future concluded, then this proceeding will remain open."

In addition to the challenges about foreign ownership, the ASLB also looked at contentions about the NRC's environmental review of the Calvert Cliffs 3 project. The environmental groups claimed that the commission failed to properly account for possible increases in solar and wind power as an alternative to a new reactor. However, the board ruled that the environmental review still remains acceptable. It also rejected claims that the review would be incomplete until the NRC considered recommendations from its Fukushima task force. The ASLB said that, as similar arguments had already been dismissed earlier over the NRC's issuance in March 2012 of a COL to Southern Company for the construction of two Westinghouse AP1000 reactors at the Vogtle site in Georgia, those arguments had to be rejected as well.

The NRC noted that, as with all decisions by the ASLB, the ruling can be appealed to its five commissioners.

Researched and written
by World Nuclear News