NRC streamlines mandatory hearing process

In its July 18, 2024 memorandum (SRM-SECY-24-0032), the Commission issued a decision that would change the process for conducting mandatory hearings and which is expected to shorten the total timeline for conducting such hearings from 4 months to about 8 weeks.  The Commission would remain the presiding officer for all mandatory hearings except those for licenses for uranium enrichment facilities, which will be delegated to the Atomic Safety and Licensing Board Panel (“ASLBP”). 

Many have advocated for the removal of mandatory hearings over the years as unnecessary red tape, arguing that the original purpose—increasing transparency of licensing decisions—has been made moot by the NRC’s transparency and multiple avenues for public participation during the NRC licensing process—things that were not in place yet at the time the mandatory hearing was implemented. 

A recent report from Idaho National Laboratory, “Recommendations to Improve the Nuclear Regulatory Commission Reactor Licensing and Approval Process” (Apr. 2023) (which we wrote about here), evaluated all mandatory hearings conducted to date and noted that they delayed license issuance by an average of 6 months, while having no impact on the NRC’s licensing review—meaning they provided no apparent benefit, while introducing long and costly delays.

This Commission decision does not eliminate mandatory hearings—which are mandated under the Atomic Energy Act—but it should reduce the time to issue a license, as well as ease licensing burdens on the NRC staff and applicants.

Background on mandatory hearings

A mandatory hearing is a non-contested proceeding in which the Commission assesses the NRC staff’s review of new reactor applications and uranium enrichment facilities. The Atomic Energy Act (“AEA”) requires that the NRC hold a “mandatory hearing” for reactor applicants and uranium enrichment facility licenses.  AEA Section 189a.(1)(A) states: “The Commission shall hold a hearing after thirty days’ notice and publication once in the Federal Register, on each [reactor application].”  Specifically, the impacted licenses generally include reactor licenses issued under 10 C.F.R. Parts 50 and 52 (including Early Site Permits and Limited Work Authorizations). Similar language is included in Section 193b. for uranium enrichment facilities.

Only the applicant and the NRC staff participate in the mandatory hearing proceeding, in addition to the Commission (which is the presiding officer unless it delegates the responsibility to the ASLBP).  The mandatory hearings are not an opportunity for the public or interested parties to engage in the licensing process, nor are they avenues for adjudication—the contested hearing pathway is the vehicle for that approach.

The NRC begins the mandatory hearing process after the NRC staff completes its review of the application and publishes a SECY information paper to the Commission describing its review.  The process is conducted much like a traditional NRC contested hearing and includes written questions and responses, written testimony, and an in-person hearing with sworn witnesses. The process concludes with a decision by the presiding officer—which is either the Commission or the ASLBP.

Notably, the AEA does not prescribe how the NRC conducts the mandatory hearing.  For example, there is no statutory requirement for oral presentation of evidence or requirements about how that evidence must be presented for issuing licenses (other than for uranium enrichment facilities).  Therefore, the NRC has quite a bit of room to determine how to conduct such hearings.

The need to increase licensing efficiencies has become a focal point for discussions on improving and streamlining the NRC’s process.  As a recent example of how specifically taxing the mandatory hearing process can be, the mandatory hearing for Kairos’ Hermes 1 caused a four-month licensing delay and additional costs of about $500,000 (which was on the smaller side for the NRC mandatory hearings given the nature of the Kairos facility as a test reactor).

On February 7, 2024, the NRC Chair Christopher Hanson requested the NRC General Counsel to “identify efficiencies in these mandatory hearings that will enable the Commission to fulfill its statutory obligations while it promotes the responsible stewardship of time and resources.”  Further, Chair Hanson stated  that “[w]hile the NRC is bound by statute to conduct mandatory hearings for certain applications, Congress did not provide direction as to how those hearings are conducted. . .[and that] the Commission has previously considered questions regarding the format and structure of these hearings over the years.”  He also noted that the Office of General Counsel should broadly consider available flexibilities in the structure and format of these proceedings and in its analysis to consider whether procedures for mandatory hearings can, or should, differ for applications that represent a "first of a kind" review.

In response, the General Counsel sent a paper back to the Commission on April 12, 2024, SECY-24-0032, “Revising the Mandatory Hearing Process at the U.S. Nuclear Regulatory Commission,” offering recommendations for the Commission’s consideration.  These recommendations included five options for the NRC staff to adopt.  Under the first three options, the Commission would conduct the mandatory hearing: exclusively on the basis of written materials (Option 1), with an added informal meeting component (Option 2), or using a simplified version of the existing oral evidentiary hearing process that reduces preparation burdens on the parties (Option 3).  Under two other options, the Commission would delegate hearing responsibilities to ASLBP (Option 4) or to a senior agency official with a Management Review Board-style review process (Option 5). 

Ultimately, the General Counsel recommended that the Commission: (1) retain its role as presiding officer for first-of-a-kind mandatory hearings under Section 189a. of the AEA, using the simplified hearing process discussed below as Option 1; (2) delegate to a senior agency official “nth-of-a-kind” mandatory hearings under that section, using a Management Review Board-style review process discussed below as Option 5; and (3) delegate to ASLBP mandatory hearings required under section 193b. for uranium enrichment facility applications, using an approach described below as Option 4.

Commission decision

In its July 18, 2024 decision, the Commission adopted a modified version of the General Counsel’s proposed “Option 1,” which removes entirely any oral portion of the hearing and shortens the hearing process to about 8 weeks total.  This written-only hearing will apply to all types of licenses for which a mandatory hearing is required except for uranium enrichment facilities, which will be treated as streamlined formal adjudications under the Administrative Procedure Act.

The vote to approve the new mandatory hearing process was unanimous:  all four Commissioners approved the adoption of a modified Option 1.  Of note, Commissioner Caputo continued advocating for the elimination of the mandatory hearing process entirely, explaining in detail how their original purpose has been accomplished by other laws and regulations, but she applauded the NRC staff’s creativity and approved the new process as an improvement.

For most hearings:  Mandatory hearings will be in written form only.  Any written testimonial and evidentiary submissions will be treated as hearing exhibits automatically without a separate formal process to introduce them as such.  The written mandatory hearing process would include the following steps and timeline:

This approach halves the time a mandatory hearing takes, from 4 months to approximately 8 weeks. Under this new approach, the Commission will serve as the presiding officer for all hearings except those regarding uranium enrichment facilities.  As mentioned, the Commission instead opted to retain its authority for all licensing decisions except those regarding enrichment facilities.

For uranium enrichment facilities, the Commission is adopting a case-specific streamlined process that will still meet the requirements of a formal adjudication.  The ASLBP will be the presiding officer for these hearings.  The Commission directed the Office of General Counsel and the ASLBP to develop a template notice of hearing for uranium enrichment facility hearings that can be adapted for each case.

What comes next 

The revisions to the mandatory hearing process are effective immediately.  After the staff completes two mandatory hearings under the new procedures—including the Hermes 2 mandatory hearing anticipated later this year—the Office of General Counsel is directed to propose limited changes based on lessons learned.  The Commission also encouraged the Office of General Counsel to evaluate potential rulemaking to modify its hearing procedures at 10 CFR Part 2 to be consistent with the new mandatory hearing process.

For more information on the NRC’s new mandatory hearing process, please contact Amy Roma, Partner, Stephanie Fishman, Senior Associate, or Cameron Tarry Hughes, Associate.