Virginia House, Senate OK Bills to Advance Development of Small Modular Nuclear Reactors

Virginia’s House and Senate have approved different versions of legislation that could help advance the deployment of small modular nuclear reactors in the state, despite environmental and ratepayer advocates’ concerns about the costs utility customers could bear for the yet-to-be-used technology.

Legislation from Del. Israel O’Quinn, R-Washington, would allow Appalachian Power Company to recover early development costs for SMRs, including expenses related to “evaluation, design, engineering, environmental analysis and permitting, land option, and early site permitting.” A similar bill from Sen. Dave Marsden, D-Fairfax, would apply to both Appalachian Power and Dominion Energy and allow certain additional costs, such as those related to federal licensing, to be recouped.

“It’s all about getting to the head of the line and putting Virginia first in terms of the supply chain for these when they become reliable and a good source of energy,” Marsden said during a committee hearing.

O’Quinn, too, said development needs to begin “sooner rather than later so that we can … decide if it’s actually feasible or not.”

But while both measures gained enough support to clear the chambers ahead of the crossover deadline, not every lawmaker was on board. Sen. Travis Hackworth, R-Tazewell, said Tuesday he couldn’t in “good conscience” vote for Marsden’s because of potential rate increases it could produce.

Small modular reactors are, as the name implies, scaled-down versions of nuclear reactors that can be manufactured offsite and built at a lower cost than conventional nuclear plants. Republican Gov. Glenn Youngkin has been particularly enthusiastic about the technology, including it in his four-year energy plan as a way to provide around-the-clock energy to the grid and pushing for its development in Southwest Virginia.

Virginia General Assembly split on whether to pursue nuclear power more aggressively

Currently, about 30% of Virginia’s electricity comes from nuclear power generated at Dominion’s Lake Anna and Surry facilities. Nuclear is also a critical component of the decarbonization plan laid out in the 2020 Virginia Clean Economy Act, which requires the state’s utilities to transition their non-nuclear energy use to renewables by mid-century.

However, while the VCEA allows the continued operation of Dominion’s nuclear plants, it removed language in Virginia law that stated “planning and development” activities for new nuclear facilities were in the public interest, a term used to favor approvals. Last year, Republican legislators attempted to make nuclear qualify as a renewable source under the law, but Democrats in the Senate rejected the proposal.

Both Appalachian Power and Dominion have expressed interest in using small modular reactors.

In hearings this session on O’Quinn and Marsden’s bills, utility lobbyists have argued the proposals would let the companies conduct important preliminary work.

“We’re only looking for the siting piece of it,” said Larry Jackson, a lobbyist for Appalachian Power, during a committee hearing on O’Quinn’s bill. “The reason we’re doing that is the technologies with small modular reactors aren’t quite mature enough yet. We wanted to go ahead and get this first piece out of the way before the technology has matured.”

Both Jackson and Dominion lobbyist Bernard McNamee, a former member of the Federal Energy Regulatory Commission, said spreading out costs over a longer period of time would also prevent customers from seeing a greater rate increase at the time a potential reactor is built.

“This is a reasonable process in order to smooth out the cost to customers,” said McNamee.

While both O’Quinn and Marsden’s bills would give the State Corporation Commission the ability to review any preliminary SMR costs the utilities ask to recover from customers, there are some differences between them. Marsden’s would let the utilities recover the costs of federal approvals — expenses that can cost millions — and equipment, while O’Quinn’s would not. Marsden’s bill would also limit a utility to developing one SMR site, although more than one reactor could be located there.

The proposals are being supported by groups, including the Virginia Manufacturers Association, which has pointed out that Virginia companies like Lynchburg’s BWXT are already involved in SMR development.

“This is a homegrown technology,” said Brett Vassey, president and CEO of the association. “This is entirely a supply chain that we own, including the fuel.”

But some environmental and ratepayer groups have argued any legislation should require the utilities to prove there is a need for an SMR and that it’s a better option than alternative technologies rather than just requiring the companies to demonstrate to regulators that their spending is “reasonable and prudent.”

“When hundreds of millions of ratepayer money is at stake, lawmakers should protect Virginians from footing the bill upfront for projects that may never power their homes,” said Laura Gonzalez Guerrero, energy policy and regulatory manager at Clean Virginia, an organization started by Charlottesville millionaire Michael Bills to counter Dominion’s influence in the General Assembly.

Critics also pointed to the high-profile failure of plans to expand the V.C. Summer conventional nuclear plant in South Carolina, which was never completed but left ratepayers on the hook for $2 billion in costs, and argued the recent abandonment of a $9.3 billion SMR project in Idaho shows the technology remains unproven.

Developing an SMR “is a risk,” said Peter Anderson, director of state energy policy for the nonprofit Appalachian Voices. “And we wonder why ratepayers should be the insurance policy for that process.”

Language in both bills would allow state regulators to return the proceeds of any sale of a site acquired by a utility under the law for an SMR to ratepayers. Marsden’s bill would not require a refund if the site was located on an existing nuclear site.

Discussion on the bills will now continue as the Senate takes up O’Quinn’s proposal and the House Marsden’s.

by Charlie Paullin, Virginia Mercury

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