[BETA] Fortnightly

(SIDE SUBHEAD)

Nuclear plant licensees could face an added level of state regulation just as they move to cut costs.Permanent disposal capacity for low-level radioactive waste (LLW) and spent nuclear fuel, long a top priority for the nuclear industry, has not yet become a reality. But the storage question draws more attention for its impact on nuclear power costs as electric generation grows more competitive. So far, most discussion has centered on fuel-cycle costs: Whether "back-end" costs (waste storage, disposal, and decommissioning) will render nuclear generating assets uncompetitive.

At the same time, this lack of disposal capacity has created another significant, though more subtle, effect. It has forced commercial nuclear power plant licensees to rely more heavily on onsite storage for LLW and spent fuel, prompting state agencies to show increased interest in regulating nuclear operations. This heightened interest, coming as it does when nuclear utilities are increasingly sensitive to their relationships with state regulators, threatens to erode exclusive federal authority.

If the trend continues, power reactor licensees may attempt to protect their economic viability by accommodating state regulation of LLW and spent-fuel storage. But such action could expose licensees to the costs and uncertainty of overlapping and often inconsistent regulation. Preserving federal preemption in regulation-while ensuring favorable relations with state regulators and yet preserve traditional federal preemption-will require support from the Nuclear Regulatory Commission (NRC) and perhaps even from Congress. It will certainly require a unified proactive industry effort.Eroding Federal Preemption

Since the passage of the Atomic Energy Act in 1954, Congress has preserved the dual regulation of nuclear electric generation. The federal government (NRC) exercises exclusive authority over radiological safety; the states review nonradiological environmental protection and economic matters, such as ratemaking and need for power. Atomic Energy Act section 274c.(1) mandates NRC authority over the "operation" of nuclear facilities. NRC rules define "operation" to include "the storage and handling of radioactive waste" by the licensee. Thus, in theory, the doctrine of federal preemption bars states from applying their own requirements to onsite LLW and spent-fuel storage, and to decommissioning activities of NRC licensees.

But since the mid-1980s, there has been an erosion of traditional federal preemption over questions involving nuclear radiological safety. The trend began in 1983, when the U.S. Supreme Court upheld a California statute that imposed a moratorium on future nuclear plant construction pending availability of permanent spent-fuel disposal capacity. See, Pacific Gas & Elec. Co. v. California Energy Resources Conservation & Develop. Comm'n, 461 U.S. 190 (1983). In upholding the California law, the Court accepted that state's "avowed economic purpose." But that decision emboldened some states to give similar reasons for expanding regulatory control, when in reality they appeared driven more by activist concerns over radiological safety.

Preemption will likely erode further as state regulators increase their interest in nuclear waste management. Nuclear waste buildup has increased public sensitivity and political demands for state involvement. Over the past few years, some state legislators and regulators have increasingly sought to intrude into nuclear plant safety regulation. In doing so, they have frustrated the efforts of plant licensees