Variable Annual Fee Structure for Small Modular Reactors, 32617-32628 [2016-11975]

Agencies

• NUCLEAR REGULATORY COMMISSION

[Federal Register Volume 81, Number 100 (Tuesday, May 24, 2016)]
[Rules and Regulations]
[Pages 32617-32628]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-11975]



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Federal Register / Vol. 81, No. 100 / Tuesday, May 24, 2016 / Rules 
and Regulations

[[Page 32617]]



NUCLEAR REGULATORY COMMISSION

10 CFR Parts 170 and 171

[NRC-2008-0664]
RIN 3150-AI54


Variable Annual Fee Structure for Small Modular Reactors

AGENCY: Nuclear Regulatory Commission.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The U.S. Nuclear Regulatory Commission (NRC) is amending its 
licensing, inspection, and annual fee regulations to establish a 
variable annual fee structure for light-water small modular reactors 
(SMR). Under the variable annual fee structure, an SMR's annual fee 
would be calculated as a function of its licensed thermal power rating. 
This fee methodology complies with the Omnibus Budget Reconciliation 
Act of 1990, as amended (OBRA-90).

DATES: This final rule is effective June 23, 2016.

ADDRESSES: Please refer to Docket ID NRC-2008-0664 when contacting the 
NRC about the availability of information for this action. You may 
obtain publicly-available information related to this action by any of 
the following methods:
     Federal Rulemaking Web site: Go to https://www.regulations.gov and search for Docket ID NRC-2008-0664. Address 
questions about NRC dockets to Carol Gallagher; telephone: 301-415-
3463; email: Carol.Gallagher@nrc.gov.
     NRC's Agencywide Documents Access and Management System 
(ADAMS): You may obtain publicly-available documents online in the 
ADAMS Public Documents collection at https://www.nrc.gov/reading-rm/adams.html. To begin the search, select ``ADAMS Public Documents'' and 
then select ``Begin Web-based ADAMS Search.'' For problems with ADAMS, 
please contact the NRC's Public Document Room (PDR) reference staff at 
1-800-397-4209, 301-415-4737, or by email to pdr.resource@nrc.gov. For 
the convenience of the reader, instructions about obtaining materials 
referenced in this document are provided in Section XIV, ``Availability 
of Documents,'' of this document.
     NRC's PDR: You may examine and purchase copies of public 
documents at the NRC's PDR, Room O1-F21, One White Flint North, 11555 
Rockville Pike, Rockville, Maryland 20852.

FOR FURTHER INFORMATION CONTACT: Michele Kaplan, Office of the Chief 
Financial Officer, U.S. Nuclear Regulatory Commission, Washington, DC 
20555-0001, telephone: 301-415-5256, email: Michele.Kaplan@nrc.gov.

SUPPLEMENTARY INFORMATION: 

Executive Summary

    The U.S. Nuclear Regulatory Commission (NRC) anticipates that it 
will soon receive license applications for light-water small modular 
reactors (SMR). In fiscal year 2008, the NRC staff determined that the 
annual fee structure for part 171 of title 10 of the Code of Federal 
Regulations fees, which was established in 1995, should be reevaluated 
to address potential inequities for future SMRs, due to their 
anticipated design characteristics. These characteristics include 
modular design, factory component fabrication, and thermal power 
capacities of 1,000 megawatts thermal or less per module. These SMRs 
may also include safety and security design features that could 
ultimately result in a lower regulatory oversight burden for this type 
of reactor. Despite these significant differences, an SMR would be 
required to pay the same annual fee as a current operating reactor 
under the NRC's current fee structure. The Omnibus Budget 
Reconciliation Act of 1990, as amended (OBRA-90) instructs the NRC to 
``establish, by rule, a schedule of charges fairly and equitably 
allocating'' various generic agency regulatory costs ``among 
licensees'' and, ``[t]o the maximum extent practicable, the charges 
shall have a reasonable relationship to the cost of providing 
regulatory services and may be based on the allocation of the 
Commission's resources among licensees or classes of licensees.'' 
Because of the significant anticipated differences between SMRs and the 
existing reactor fleet, applying the current fee structure to SMRs 
could be contrary to OBRA-90's requirement that the NRC's fees be 
``fairly and equitably'' allocated among its licensees. Therefore, the 
NRC is implementing a variable annual fee structure for SMR licensees 
that would include a minimum fee, a variable fee, and a maximum fee 
based on an SMR site's cumulative licensed thermal power rating.
    The NRC prepared a regulatory analysis for this final rule (see 
Section XIV, ``Availability of Documents'').

Table of Contents

I. Background
II. Discussion
III. Opportunities for Public Participation
IV. Public Comment Analysis
V. Discussion of Amendments by Section
VI. Regulatory Flexibility Certification
VII. Regulatory Analysis
VIII. Backfitting and Issue Finality
IX. Plain Writing
X. National Environmental Policy Act
XI. Paperwork Reduction Act
XII. Congressional Review Act
XIII. Voluntary Consensus Standards
XIV. Availability of Documents

I. Background

A. Operating Reactor Annual Fee Structure

    Over the past 40 years, the U.S. Nuclear Regulatory Commission 
(NRC) has assessed, and continues to assess, fees to applicants and 
licensees to recover the cost of its regulatory program. The NRC's fee 
regulations are governed by two laws: (1) The Independent Offices 
Appropriations Act of 1952 (IOAA) (31 U.S.C. 9701); and (2) the Omnibus 
Budget Reconciliation Act of 1990, as amended (OBRA-90) (42 U.S.C. 
2214). Under the OBRA-90 framework, the NRC must recover approximately 
90 percent of its annual budget authority through fees, not including 
amounts appropriated for waste incidental to reprocessing activities, 
amounts appropriated for generic homeland security activities, amounts 
appropriated from the Nuclear Waste Fund, and amounts appropriated for 
Inspector General services for the Defense Nuclear Facilities Safety 
Board.
    The NRC assesses two types of fees to meet OBRA-90's requirements. 
First, the NRC assesses licensing and inspection fees under the IOAA to

[[Page 32618]]

recover the NRC's cost of providing specific benefits to identifiable 
applicants and licensees--these fees are in part 170 of Title 10 of the 
Code of Federal Regulations (10 CFR). The NRC also assesses annual fees 
to recover any generic regulatory costs that are not otherwise 
recovered through 10 CFR part 170 fees during the fiscal year--these 
annual fees are in 10 CFR part 171.
    The current annual fee structure in 10 CFR part 171 would require 
SMRs to pay the same annual fee as those paid by the operating reactor 
fee class. For the operating reactor fee class, the NRC allocates 10 
CFR part 171 annual fees equally among the operating power reactor 
licensees to recover those budgetary resources expended for rulemaking 
and other generic activities that benefit the entire fee class. If 10 
CFR part 171, in its current form, is applied to SMRs, then each SMR 
reactor would pay the same flat annual fee as an existing operating 
reactor, even though SMRs are expected to be considerably smaller in 
size and may utilize designs that could reduce the NRC's regulatory 
costs per reactor.
    Additionally, the current annual fee structure would assess 
multimodule nuclear plant annual fees on a per-licensed-module basis 
(rather than a site basis). For example, an SMR site with 12 licensed 
SMR modules (each with low thermal power ratings) would have to pay 12 
times the annual fee paid by a single large operating reactor, even if 
that single reactor had higher thermal power rating than the cumulative 
power rating of the 12 SMR modules. This disparity raises fairness and 
equity concerns under OBRA-90. The SMR licensees could apply for fee 
exemptions to lower their annual fees. However, fee exemption are 
appropriate only for unanticipated or rare situations. The OBRA-90 
statute requires the NRC to establish, by rule, a schedule of charges 
fairly and equitably allocating annual fees among its licensees. If the 
NRC anticipates up front that its annual fee schedule will not be fair 
and equitable as applied to a particular class of licensees, then 
amending the fee schedule, rather than planning to rely on the 
exemption process, is the better course of action for complying with 
OBRA-90.

B. Advance Notice of Proposed Rulemaking Regarding an Annual Fee 
Structure for SMRs

    To address potential inequities, the NRC re-evaluated its annual 
fee structure as it relates to SMRs. In March 2009, the NRC published 
an Advance Notice of Proposed Rulemaking (ANPR) (74 FR 12735) for a 
variable annual fee structure for power reactors in the Federal 
Register. Although the ANPR nominally addressed the fee methodology 
used for all power reactors, its principal focus was on how to best 
adapt the existing fee methodology for future SMRs.
    The NRC received 16 public comments on the ANPR from licensees, 
industry groups, and private individuals. These comments provided a 
wide range of input for agency consideration. Nine commenters supported 
adjusting the current power reactor annual fee methodology for small 
and medium-sized power reactors by some means. These commenters 
suggested basing the annual fee on either: (1) A risk matrix, (2) the 
thermal power ratings (in megawatts thermal, MWt), (3) the cost of 
providing regulatory service, or (4) an amount proportional to the size 
of the system based on megawatt (MW) ratings compared to a fixed 
baseline. Three commenters, representing small reactor design vendors, 
supported a variable fee rate structure as a means to mitigate the 
impacts of the existing fee structure on potential customers of their 
small reactor designs.
    Commenters who did not support a variable annual fee structure 
recommended the following changes to the fee methodology: (1) 
Reinstatement of reactor size as a factor in evaluating fee exemption 
requests under 10 CFR 171.11(c), (2) establishment of power reactor 
subclasses, or (3) performance of additional analysis before making any 
changes to the current fee structure. Two commenters expressed an 
unwillingness to subsidize operating SMRs at the expense of their own 
businesses and believed that the flat-rate methodology provided 
regulatory certainty and assisted the ability to make ongoing financial 
plans.
    In September 2009, the NRC staff submitted SECY-09-0137, ``Next 
Steps for Advance Notice of Proposed Rulemaking on Variable Annual Fee 
Structure for Power Reactors,'' (ML092660166) to the Commission for a 
notation vote. The paper summarized the comments that the NRC received 
in response to the ANPR, and it requested Commission approval to form a 
working group to analyze the commenters' suggested methodologies. The 
Commission approved the NRC staff's recommendation in the October 13, 
2009, Staff Requirements Memorandum (SRM) for SECY-09-0137. 
(ML092861070)

C. Evaluation of Four Alternative Annual Fee Structures for SMRs

    The NRC subsequently formed a working group to analyze the ANPR 
comments (ML14307A812), as well as position papers submitted to the NRC 
from the Nuclear Energy Institute (NEI), ``NRC Annual Fee Assessment 
for Small Reactors,'' (ML103070148) dated October 2010; and from the 
American Nuclear Society (ANS), ``Interim Report of the American 
Nuclear Society President's Special Committee on Small and Medium Sized 
Reactor (SMR) Generic Licensing Issues,'' (ML110040946) dated July 
2010.
    Four possible alternatives emerged from the working group's 
analysis of the public comments and the two position papers:
    1. Continue the existing annual fee structure, but define a modular 
site of up to 12 reactors or 4,000 megawatts thermal (MWt) licensed 
power rating as a single unit for annual fee purposes.
    2. Create fee classes for groups of reactor licensees and 
distribute the annual fee costs attributed to each fee class equally 
among the licensees in that class.
    3. Calculate the annual fee for each licensed power reactor as a 
function of potential risk to public health and safety using a risk 
matrix.
    4. Calculate the annual fee for each licensed power reactor as a 
function of its licensed thermal power rating.
    The NRC staff further concluded that Alternative 3, which 
calculated the annual fee for each SMR as a function of its potential 
risk to public health and safety using a risk matrix, did not warrant 
further consideration and analysis because of the technical 
complexities and potential costs of developing the probalistic risk 
assessments necessary to implement this alternative.

D. Preferred Approach for an Annual Fee Structure for SMRs

    The working group examined the alternatives and informed the NRC's 
Chief Financial Officer (CFO) that Alternative 4 was the working 
group's preferred recommendation because it allows SMRs to be assessed 
specific fee amounts based on their licensed thermal power ratings 
(measured in MWt) on a variable scale with a minimum fee and a maximum 
fee. Additionally, the variable portion of the fee allows for multiple 
licensed SMR reactors on a single site up to 4,000 MWt to be treated as 
a single reactor for fee purposes. The working group determined that 
these attributes best aligned with OBRA-90's fairness and equity 
requirements.

[[Page 32619]]

    The CFO submitted the final recommendations to the Commission in an 
informational memorandum dated February 7, 2011, ``Resolution of Issue 
Regarding Variable Annual Fee Structure for Small and Medium-Sized 
Nuclear Power Reactors.'' (ML110380251) The memorandum described the 
results of the working group's efforts and its recommendation that the 
annual fee structure for SMRs be calculated for each newly licensed 
power reactor as a function of its licensed thermal power rating. The 
memorandum indicated that the NRC staff intended to obtain Commission 
approval for the planned approach during the process for developing the 
proposed rule.
    In fiscal year (FY) 2014, the NRC staff reviewed the analysis and 
recommendations in the 2011 memorandum and determined that they 
remained sound. However, the working group identified one additional 
area for consideration related to the maximum thermal power rating 
eligible for a single annual fee.
    In the FY 2011 memorandum, the CFO proposed an upper threshold of 
4,000 MWt for multi-module power plants to be allocated a single annual 
fee. This value was comparable to the largest operating reactor units 
at the time (Palo Verde Nuclear Generating Station, Units 1, 2, and 3 
at 3,990 MWt each). A subsequent power uprate was approved by the NRC 
for Grand Gulf Nuclear Station, Unit 1, which raised the maximum 
licensed thermal power rating to 4,408 MWt. Therefore, the 2014 working 
group recommended setting the single-fee threshold for a multi-module 
nuclear plant at 4,500 MWt on the SMR variable annual fee structure 
scale so that the maximum fee remains aligned with the largest licensed 
power reactor.
    With this change, the NRC staff submitted final recommendations to 
the Commission and requested approval to proceed with a proposed 
rulemaking for an SMR annual fee structure in SECY-15-0044, dated March 
27, 2015, ``Proposed Variable Annual Fee Structure for Small Modular 
Reactors.'' (ML15051A092) The Commission approved the NRC staff's 
request to proceed with a proposed rulemaking on May 15, 2015, Staff 
Requirements Memorandum--SECY-15-0044, ``Proposed Variable Annual Fee 
Structure for Small Modular Reactors.'' (ML15135A427)
    Separately, under Project Aim, the agency is working to improve the 
transparency of its fees development and invoicing processes and to 
improve the timeliness of NRC communications on fee changes. More 
information about this effort can be found in the Federal Register (81 
FR 15352; March 22, 2016).

II. Discussion

    The NRC is creating a variable annual fee structure for SMRs. As 
detailed in the regulatory analysis, the NRC determined the current 
annual fee structure may not be fair and equitable for assessing fees 
to SMRs based on the unique size and characteristics of SMRs. The NRC 
published, for a 30-day public comment period, a proposed rule on 
November 4, 2015, to address these issues. The NRC developed this final 
rule based on the comments received on the proposed rule. The comments 
are discussed in Section IV, ``Public Comment Analysis,'' of this 
document. Because the annual regulatory cost associated with an SMR is 
inherently uncertain before such a licensed facility is operational, 
the NRC intends to reevaluate the variable annual fee structure at the 
appropriate time to ensure the continuing satisfaction of OBRA-90 
requirements. This reevalulation will occur once one or more SMR 
facilities becomes operational and sufficient regulatory cost data 
becomes available.
    As explained in Section I, ``Background,'' of this document, the 
NRC staff previously solicited public input regarding an annual fee 
structure for SMRs via an ANPR, and the NRC staff submitted two papers 
to the Commission discussing alternative annual fee structures, which 
resulted in the recommendation of the variable annual fee structure as 
the preferred approach for SMRs. For this final rule and regulatory 
analysis, the NRC staff examined the following four refined 
alternatives including a ``no action alternative'' which served as a 
baseline to compare all other alternatives:
    1. No action.
    2. Continue the existing annual fee structure for all reactors but 
allow for ``bundling'' of SMR reactor modules up to a total of 4,500 
MWt as a single SMR ``bundled unit.''
    3. Continue the existing annual fee structure for the current fleet 
of operating power reactors but establish a third fee class for SMRs 
with fees commensurate with the budgetary resources allocated to SMRs.
    4. Continue the existing annual fee structure for the current fleet 
of operating power reactors but calculate the annual fee for each SMR 
site as a multi-part fee which includes minimum fee, variable fee and 
maximum fee.
    As explained in the regulatory analysis for this final rule, the 
NRC staff analyzed Alternative 1 (the no action alternative) and 
concluded that this alternative continues to be a fair, equitable and 
stable approach for the existing fleet of reactors. This is because 
previous agency efforts to manage cost and fee allocations at a more 
granular level were labor intensive and resulted in minimal additional 
benefits to licensees when compared to the flat-fee approach (60 FR 
32230; June 20, 1995). For SMRs, however, the current fee structure 
could produce such a large disparity between the annual fees paid by a 
licensee and the economic benefits that the licensee could gain from 
using the license that it would be contrary to OBRA-90's requirement to 
establish a fair and equitable fee schedule. For example, a 
hypothetical SMR site with 12 SMR reactor modules would have to pay 12 
times the annual fee paid by a single current operating reactor--almost 
$54 million per year based on FY 2015 fee rule data. By comparison, 
Fort Calhoun, the smallest reactor in the current operating fleet, 
would pay approximately $4.5 million in annual fees. Such a result 
would be contrary to OBRA-90's requirement to establish a fair fee 
schedule, and therefore the no action alternative is unacceptable.
    Small modular reactor licensees could apply for annual fee 
exemptions under 10 CFR 171.11(c). The fee exemption criteria consider 
the age of the reactor, number of customers in the licensee's rate 
base, how much the annual fee would add to the per kilowatt-hour (kWh) 
cost of electricity, and other relevant issues. But, as described in 
SECY-15-0044, there are no guarantees that an exemption request would 
be approved, decreasing regulatory certainty. The OBRA-90 statute also 
requires the NRC to establish, by rule, a schedule of charges fairly 
and equitably allocating annual fees among its licensees. Therefore, if 
the NRC anticipates up-front that its annual fee schedule will not be 
fair and equitable as applied to a particular class of licensees, then 
amending the fee schedule, rather than planning to rely on the 
exemption process, is the far better course for complying with OBRA-90.
    The NRC staff also evaluated Alternative 2, which continues the 
existing annual fee structure for all reactors and allows for the 
bundling of the thermal ratings of SMRs on a single site up to total 
licensed thermal power rating of up to 4,500 MWt, which is roughly 
equivalent to the licensed thermal power rating of the largest reactor 
in the current fleet. Alternative 2 provides more fairness to SMRs than 
Alternative 1 because it allows SMR licensees to bundle their SMRs on a 
single site. However, for smaller SMR

[[Page 32620]]

facilities, Alternative 2 would still create great disparities among 
SMR facilities in terms of the annual fees they would pay relative to 
the economic benefits they stand to gain from their NRC licenses. 
Consider, for illustrative purposes, an SMR site with only one NuScale 
reactor module. The licensee for this site would be required to pay the 
full annual fee, but could only spread the fee over 160 MWt--about 
$31,123 per MWt. In contrast, the licensee for an SMR site featuring 12 
NuScale reactor modules would pay only $2,594 per MWt in annual fees. 
Alternative 2, therefore, only goes part of the way toward addressing 
the fairness and equity concerns that prompted this rulemaking. As with 
Alternative 1, smaller SMR licensees could apply for annual fee 
exemptions under 10 CFR 171.11(c). There are no guarantees that an 
exemption would be approved, decreasing regulatory certainty. For these 
reasons, and as further explained in the regulatory analysis, the NRC 
staff finds Alternative 2 to be an unacceptable approach.
    Alternative 3 entails creating a separate fee class for SMRs, with 
fees commensurate with the budgetary resources allocated to SMRs, 
similar to the operating reactor and research and test reactor fee 
classes. This alternative would establish a flat annual fee assessed 
equally among SMR licensees. Although this approach is fair and 
equitable for the current operating reactor fee class, applying a flat 
fee approach to SMRs poses fairness problems due to the potential 
various sizes and types of SMR designs. In particular, a single per-
reactor fee could prove unduly burdensome to SMRs with low thermal 
power ratings (such as 160 MWt for a single NuScale SMR) when compared 
to SMRs with higher-rated capacities (such as 800 MWt for a single 
Westinghouse SMR). Additionally, Alternative 3 is similar to the ``no 
action'' alternative in the sense that fees are based per licensed 
reactor or module rather than on the cumulative licensed thermal power 
rating. This alternative, therefore, fails to address the fee disparity 
created for SMRs using multiple small modules rather than fewer, larger 
reactors with a similar cumulative licensed thermal power rating. It is 
the NRC's intent to select an SMR fee alternative that is fair and 
equitable for the broadest possible range of SMR designs. Flat-rate 
alternatives such as this one are inconsistent with the ``fair and 
equitable'' requirements of OBRA-90 when applied to a fee class with 
the wide range of SMR thermal power capacities as described by reactor 
designers to date. As with the previous alternatives, SMR licensees 
could apply for annual fee exemptions under 10 CFR 171.11(c); however, 
there are no guarantees that an exemption would be approved, decreasing 
regulatory certainty. For these reasons, and as further explained in 
the regulatory analysis, Alternative 3 is an unacceptable approach.
    Ultimately, the NRC staff analyzed the mechanics of the variable 
annual fee structure under Alternative 4 and determined that it is the 
best approach for assessing fees to SMRs in a fair and equitable manner 
under OBRA-90. Unlike the current fee structure, this approach 
recognizes the anticipated unique characteristics of SMRs in relation 
to the existing fleet. Unlike Alternative 2, this approach ensures that 
all SMRs are treated fairly, including those SMRs whose licensed 
thermal power rating are outside the 2,000 MWt-4,500 MWt range. Unlike 
Alternative 3, the variable annual fee structure assesses a range of 
annual fees to SMRs based on licensed thermal power rating, rather than 
assessing a single flat fee that could potentially apply to a very wide 
range of SMRs.
    The SMR variable annual fee structure under Alternative 4 computes 
SMR annual fees on a site basis, considering all SMRs on the site--up 
to a total licensed thermal power rating of up to 4,500 MWt--to be a 
single ``bundled unit'' that would pay the same annual fee as the 
current operating reactor fleet. The SMR fee structure has three parts: 
A minimum fee (the average of the research and test reactor fee class 
and the spent fuel storage/reactor decommissioning fee class), a 
variable fee charged on a per-MWt basis for bundled units in a 
particular size range, and a maximum fee equivalent to the flat annual 
fee charged to current operating fleet reactors.
    Bundled units with a total licensed thermal power rating at or 
below 250 MWt would only pay a minimum fee; for example, based on FY 
2015 fee rule data, that minimum fee would be $153,250. This minimum 
fee is consistent with the principle that reactor-related licensees in 
existing low-fee classes may not generate substantial revenue, yet 
still derive benefits from NRC activities performed on generic work. 
Therefore, they must pay more than a de minimis part of the NRC's 
generic costs. By calculating the minimum fee for SMRs within the range 
of annual fees paid by other low-fee reactor classes, this methodology 
satisfies the OBRA-90 fairness and equity requirements because it 
ensures consistent NRC treatment for low-power and low-revenue 
reactors.
    Fees for bundled units with a total licensed thermal power rating 
greater than 250 MWt and less than or equal to 2,000 MWt would be 
computed as the minimum fee plus a variable fee based on the bundled 
unit's cumulative licensed thermal power rating. The variable fee 
should generally correlate with the economic benefits the licensee is 
able to derive from its NRC license and will ensure that similarly 
rated SMRs pay comparable fees.
    For a bundled unit with a licensed thermal power rating comparable 
to a typical large light-water reactor--i.e., greater than 2,000 MWt 
and less than or equal to 4,500 MWt--the annual fee assessed to that 
bundled unit would be the same annual flat fee that is paid by a power 
reactor licensee in the current operating fleet. This approach ensures 
comparable fee treatment of facilities that stand to derive comparable 
economic benefits from their NRC-licensed activities.
    For SMR sites with a licensed thermal power rating that exceeds 
4,500 MWt, the licensee would be assessed the maximum fee for the first 
bundled unit, plus a variable annual fee for the portion of the thermal 
rating above the 4,500 MWt level and less than or equal to 6,500 MWt 
for the second bundled unit (the licensee would not incur a second 
minimum fee for the same SMR site, because minimum fees are only 
assessed on a per-site basis). If a site rating exceeds the 6,500 MWt 
level, and also is less than or equal to 9,000 MWt, then a second 
maximum fee would be assessed for the second bundled unit. The NRC 
considered eliminating the second variable portion of the fee structure 
and simply doubling the maximum fee for the second bundled unit, but 
this would produce an unfair result if the site's second bundled unit 
had a small licensed thermal power rating. Similar to the other three 
alternative fee structures, this method--doubling the maximum fee for 
the second bundled unit--would not have addressed the inequities that 
arise when a very small bundled unit pays a very large annual fee.
    Therefore, as demonstrated in the regulatory analysis, the NRC 
staff concludes that the variable annual fee structure allows SMRs to 
pay an annual fee that is commensurate with the economic benefit 
received from its license and that appropriately accounts for the 
design characteristics and current expectations regarding regulatory 
costs. This complies with OBRA-90's requirement to establish a

[[Page 32621]]

fee schedule that fairly and equitably allocates NRC's fees.

III. Opportunities for Public Participation

    Section I B., ``Background'' of this document discusses the ANPR 
and the public comments that helped to shape the proposed rule, 
``Variable Annual Fee Structure for Small Modular Reactors,'' that NRC 
published in the Federal Register on November 4, 2015 (80 FR 68268), 
for a 30-day public comment period. The rule proposed to implement a 
variable annual fee structure for small modular reactors given their 
unique design features that would meet the requirements of OBRA-90 as 
it relates to the fairness and equity of fees. The public comment 
period for the proposed rule closed on December 4, 2015. The NRC 
received nine public comment submissions that are discussed in Section 
IV, ``Public Comment Analysis,'' of this document.
    The NRC held a category 3 public meeting on the proposed rule and 
draft regulatory analysis (ML15226A588) during the comment period, 
specifically, on November 16, 2015, to promote transparency and obtain 
feedback from industry representatives, licensees and other external 
stakeholders. During the meeting, NRC staff addressed questions 
pertaining to the 10 CFR parts 170 and 171 definitions, the fee 
methodology for the bundled unit and out-of-scope comments such as 
life-cycle costs of SMRs, the charging of fees to future licensees for 
the monitoring of both air and water emitted around nuclear facilities, 
and the nuclear waste fee.

IV. Public Comment Analysis

    The NRC received nine comment submissions on the proposed rule. The 
comments are posted on www.regulations.gov under Docket ID NRC-2008-
0664. The majority of commenters support a variable annual fee 
structure for small modular reactors based on the total cumulative 
licensed thermal power rating. Some commenters suggested that the 
proposed rulemaking be expanded to non-light water SMRs and that the 
proposed definitions and regulations be modified as applicable under 10 
CFR parts 170 and 171. Another commenter believed the proposed rule 
could be more fair to the existing fleet. The commenters are listed and 
classified in the following table:

----------------------------------------------------------------------------------------------------------------
                Commenter                           Affiliation                    ADAMS Accession No.
----------------------------------------------------------------------------------------------------------------
Nancy Foust..............................  Private Citizen.............  ML15320A546 (#1).
Per Peterson.............................  University of California,     ML15320A547 (#2).
                                            Berkeley.
Tyler Ellis..............................  Massachusetts Institute of    ML15327A219 (#3).
                                            Technology (MIT).
Caroline Cochran.........................  UPower Technologies, Inc....  ML15341A349 (#4).
Christopher Bergan.......................  Private Citizen.............  ML15341A350 (#5).
Douglas Weaver...........................  Westinghouse Electrical       ML15341A351 (#6).
                                            Company (WEC).
Edward C. Rampton........................  Utah Associated Municipal     ML15341A352 (#7).
                                            Power Systems (UAMPS).
Zackary J. Rad...........................  NuScale Power LLC...........  ML15341A353 (#8).
Russell J. Bell..........................  Nuclear Energy Institute....  ML15343A512 (#9).
----------------------------------------------------------------------------------------------------------------

A. Specific 10 CFR Part 170 Issues

    Comment: One commenter was unclear as to why the definitions 
``small modular reactor,'' ``small modular reactor site,'' and 
``bundled unit'' being proposed to 10 CFR part 170 were necessary, 
because these definitions did not appear to be related to the fees 
charged in this section. The commenter further stated that the NRC 
should delete the definition for bundled unit, small modular reactor, 
and small modular reactor site, but keep the definition for small 
modular reactor under 10 CFR part 170 if necessary. (NEI, UAMPS and 
UPower Technologies)
    Response: The NRC agrees with the commenter that the bundled unit 
definition should be removed from 10 CFR part 170 because the term is 
used solely for the purpose of calculating annual fees for SMRs. 
However, the NRC will retain the definitions of SMR and SMR site under 
10 CFR part 170 to make transparent that SMRs and SMR sites can be 
charged hourly fees under 10 CFR part 170 for specific services 
performed by the NRC for these licensees. A change was made to the 
final rule in response to this comment.

B. Specific 10 CFR Part 171 Issues

    Comment: One commenter stated, ``. . . the rule language is not 
entirely clear on the relationship between SMR licenses, SMR modules, 
SMR plants, the SMR site (which may include several SMR modules, 
plants, and licenses), and bundled units (which serve as the basis for 
the calculation of the annual fee).'' The commenter suggested that the 
NRC modify the definition of ``bundled unit'' to mean, ``A measure of 
the cumulative licensed thermal power rating for one or more SMRs 
located on a single site. One bundled unit is less than or equal to 
4,500 MWt. An additional bundled unit is not established until the 
preceding bundled unit reaches the cumulative 4,500 MWt rating. The 
thermal rating of a module can be split between two bundled units for 
the purposes of assessing annual fees under Sec.  171.15(e).'' (NEI).
    Response: The NRC agrees with the commenter that the definitions as 
identified by the commenter and their relationships under the SMR fee 
structure methodology could be made more clear. The language in Sec.  
171.3, Scope, identifies the licensees and others subject to annual 
fees. For the purposes of this rule, any SMR module, reactor, plant, or 
site licensed for operation by the NRC is subject to annual fees under 
10 CFR part 171. For the purposes of this rule, the SMR module is a 
reactor. As noted in the regulatory analysis, the NRC defines the 
building that houses co-located SMR reactor modules sharing common 
systems as a ``plant,'' and the geographically bounded area that houses 
single or multiple plants as a ``site.'' Finally, the definition of a 
``bundled unit'' has been reworded to provide more clarity while 
addressing the commenter's concerns. A change was made to the final 
rule in response to this comment.
    Comment: The same commenter stated that the Sec.  171.15(e)(1) 
proposed language regarding the annual fee paid for each license held 
could be misinterpreted to mean that the determination of a bundled 
unit is limited to the SMR modules covered by a single license, 
regardless of the number of licenses that comprise a single SMR plant 
or the number of SMR plants on a single SMR site. The commenter 
suggested that the NRC should modify Sec.  171.15(e)(1), Annual Fees, 
by stating, ``Each person holding an operating license for a small 
modular

[[Page 32622]]

reactor issued under part 50 of this chapter or that holds a combined 
license issued under part 52 of this chapter, after the Commission has 
made the finding under 10 CFR 52.103(g) shall pay the annual fee for 
all licenses held for an SMR site during the fiscal year in which the 
fee is due.'' (NEI)
    Response: The NRC agrees with the commenter that the rule language 
could be more clear regarding the relationship between the NRC's 
assessment of annual fees to SMRs and SMR licenses. The final language 
in this section has been clarified to indicate that the bundled unit 
concept--which is used to compute annual fees--applies on a site-wide 
basis and is independent of the number of actual SMR licenses or the 
sequencing of the SMR licenses issued for that site. A change was made 
to Sec.  171.15(e)(1) and to Sec.  171.5 in the final rule as a result 
of this comment.
    Comment: The same commenter stated that the current rule language 
in Sec.  171.15(e)(1) and the definition of ``bundled unit'' does not 
make clear that a bundled unit can be comprised of modules from more 
than one SMR plant, and that an additional bundled unit is not 
established before the preceding bundled unit reaches the cumulative 
4,500 MWt rating. (NEI)
    Response: The NRC agrees with the commenter that the proposed 
bundled unit definition and proposed language for Sec.  171.15(e)(1) 
could be more clear regarding the transition from the first bundled 
unit to additional bundled units. As explained in the previous comment, 
a change was made to Sec.  171.15(e)(1) and to Sec.  171.5 in the final 
rule as a result of this comment.
    Comment: One commenter stated that the proposed rule does not 
explicitly state that the annual fee assessed for SMRs, a type of power 
reactor, is in lieu of annual fees assessed for power reactors under 
Sec.  171.15(b). This could lead to the misinterpretation that SMRs are 
assessed both sets of annual fees. The commenter stated the NRC should 
revise Sec.  171.15(e)(3) to read, ``(3) The annual fee for an SMR 
collected under paragraph (e) of this section is in lieu of any fee 
otherwise required under paragraph (b) of this section. The annual fee 
under paragraph (e) of this section covers the same activities listed 
for the power reactor base annual fee and spent fuel storage/reactor 
decommissioning reactor fee.'' (NEI)
    Response: The NRC agrees with the commenter that the proposed 
language could imply that an SMR licensee would be charged a base 
annual fee and spent fuel storage/reactor decommissioning annual fee in 
addition to an SMR annual fee. A change was made to the final rule in 
response to this comment. Specifically, the language in Sec.  
171.15(e)(3) has been revised to read, ``(3) The annual fee for an SMR 
collected under paragraph (e) of this section is in lieu of any fee 
otherwise required under paragraph (b) of this section. The annual fee 
under paragraph (e) of this section covers the same activities listed 
for the power reactor base annual fee and spent fuel storage/reactor 
decommissioning reactor fee.''
    Comment: One commenter stated that the definition of ``variable 
rate'' could be simplified because it is difficult to determine how the 
variable rate applies to additional bundled units, and it appears 
inconsistent with the proposed definition of a bundled unit. The 
commenter suggested that NRC redefine the variable rate definition by 
stating, ``Variable rate means a per-MWt fee factor applied to all 
bundled units on a site. For the first bundled unit with a licensed 
thermal power rating greater than 250 MWt and less than or equal to 
2,000 MWt, the factor is based on the difference between the maximum 
fee and the minimum fee, divided by 1,750 MWt (the variable fee 
licensed thermal rating range). For additional bundled units with a 
licensed thermal power rating greater than 0 and less than or equal to 
2,000 MWt, the factor is based on the maximum fee divided by 2,000 
MWt.'' (NEI)
    Response: The NRC agrees with the commenter that the proposed 
variable rate definition is inconsistent with the proposed definition 
of bundled unit. The NRC has redefined the variable rate based on the 
commenter's suggestion and revised the bundled unit definition for 
clarity. A change was made to the final rule in response to this 
comment.
    Comment: One commenter believes the description of additional 
bundled units in the table Sec.  171.15(e)(2) is confusing and 
unnecessary. The same commenter believes it is inconsistent with the 
proposed definition of ``bundled unit,'' which states that a ``bundled 
unit is less than or equal to 4,500 MWt.'' The table can be interpreted 
to mean that the range of thermal capacity is describing the SMR site 
thermal power rating totals, and not an additional bundled unit. 
Additionally, including SMR site thermal power rating totals in the 
table unnecessarily complicates the bundled approach. The table can 
also be interpreted to mean the first 4,500 MWt of additional bundled 
units (e.g., the second bundled unit) is not assessed an annual fee. 
The description could also be interpreted to unnecessarily limit the 
SMR site total thermal rating to 9,000 MWt. The same commenter is not 
aware of any other fee-based requirement that would limit a site's 
total thermal output, but notes there is at least one nuclear facility 
in the U.S. with almost a 12,000 MWt total thermal rating. The rule 
should clarify the following: (1) If any bundled unit would exceed 
4,500 MWt, an additional bundle would exist for the portion of the 
thermal rating above 4,500 MWt; and (2) the same bundled fee schedule 
should apply to any successive bundle. The commenter suggested the NRC 
revise the description of addition bundled units in the thermal rating 
power rating scale by replacing ``>4,500 MWt <= 6,500 MWt'' with ``>0 
MWt <= 2,000 MWt'' and replacing ``>6,500 <=9,000 MWt'' with ``>2,000 
MWt.'' (NEI)
    Response: The NRC agrees with the commenter that the proposed table 
and the bundled unit definition could be interpreted to read that 
licensees are limited to bundled units less than 9,000 MWt, yet the 
proposed definition of bundled unit allows for bundled units to exceed 
9,000 MWt. Therefore, the NRC has revised the table for Sec.  
171.15(e)(2) and bundled unit definition for clarity based on the 
commenter's concerns. A change was made to the final rule in response 
to this comment. The bundled unit definition has been revised as 
mentioned in our previous response and the table for Sec.  171.15(e)(2) 
has been revised to read as follows: (2) The annual fees for a small 
modular reactor(s) located on a single site to be collected by 
September 30 of each year, are as follows:

----------------------------------------------------------------------------------------------------------------
  Bundled unit thermal power rating          Minimum fee              Variable fee             Maximum fee
----------------------------------------------------------------------------------------------------------------
First Bundled Unit
    0 MWt <= 250 MWt................  TBD                       N/A                      N/A.
    > 250 MWt <= 2,000 MWt..........  TBD                       TBD                      N/A.
    > 2,000 MWt <= 4,500 MWt........  N/A                       N/A                      TBD.
Additional Bundled Units
    0 MWt <= 2,000 MWt..............  N/A                       TBD                      N/A.

[[Page 32623]]

 
    >2,000 MWt <= 4,500 MWt.........  N/A                       N/A                      TBD.
----------------------------------------------------------------------------------------------------------------

    Comment: One commenter stated that the new fee structure must be 
fair to both SMRs and the current operating fleet. The current 
operating fleet should not subsidize SMR's regulatory costs and that 
the proposed rule could be made fairer in this regard. (Westinghouse)
    Response: The NRC agrees in part and disagrees in part with this 
comment. The NRC agrees that the new structure must be fair to both 
SMRs and to the current operating fleet. As discussed, OBRA-90 requires 
this fairness, and the NRC has worked through a variety of competing 
interests to attain the most balanced approach possible.
    With respect to the degree of fairness achieved by the rule, the 
NRC disagrees with the comment. The OBRA-90 statutes require the NRC to 
collect annual fees from licensees, including licensees from the 
operating reactor fee class. Therefore, adding a new SMR to the reactor 
fleet would result in a greater base of operating reactors over which 
to spread the required 10 CFR part 171 annual fee collection; this, in 
turn, leads to a lower 10 CFR part 171 fee amount per reactor. Under 
the variable annual fee structure, SMRs with a bundled unit rating 
below 2,000 MWt will pay less in 10 CFR part 171 fees than a current 
operating reactor. Therefore, the addition of an SMR would result in a 
slightly smaller fee reduction than would have been realized for the 
addition of a large light-water reactor. Using FY15 data, this 
difference in fee reduction is, at most, about one percent of the 10 
CFR part 171 annual fee for each current operating reactor. The NRC 
believes this is a fair result because SMRs should pay annual fees that 
are commensurate with the economic benefit received from their license, 
and this rule achieves that objective without altering the existing fee 
structure for operating reactors. As previously explained, this rule 
also achieves this objective with minimal impacts to the existing 
fleet. No change was made to the final rule in response to this 
comment.
    Comment: One commenter believes that linking the fees paid by 
research and test reactors (RTRs) to fees paid by smaller SMRs under 
the Alternative 4 appears to violate the fairness test required by 
OBRA-90. The commenter further states RTRs are used for training and 
research which provides benefits to the entire industry. The commenter 
points out that RTRs do not sell power nor do they compete with the 
current fleet of reactors. The same commenter, therefore, suggests that 
the NRC not link the minimum SMR fee to RTR fees, but instead develop 
an estimate of the minimum costs of the regulatory services that it 
expects to provide to an SMR. This method would reduce the likelihood 
that the fees would have to be substantially altered after an SMR has 
been operating and is in alignment with OBRA-90 as it pertains to 
assessed charges having a reasonable relationship to the cost of 
providing regulatory services. (Westinghouse)
    Response: The NRC disagrees with the comment. At this time, the NRC 
is unable to develop an estimate of the minimum costs of regulatory 
services that it expects to provide to an SMR due to lack of cost data 
and operating experience. Therefore, the minimum fee is calculated by 
averaging annual fees for both the research and test reactor fee class 
and the spent fuel storage/reactor decommissioning fee class. The 
minimum fee ensures that even the smallest SMRs bear some of the annual 
10 CFR part 171 fee burden. Although a size and purpose disparity 
exists between the smallest currently proposed SMRs and RTRs, the 
minimum fee calculation was not intended to equate the regulatory 
support requirements of SMRs and RTRs. Rather, the calculation was 
intended to identify current fees for low power reactor fee classes to 
set an initial minimum fee value. The NRC believes the lower power 
reactor fee classes serving as the threshold for the minimum fee 
satisfies the requirements of OBRA-90 as it relates to the fairness and 
equitable distribution of fees because it establishes consistency 
between low-power SMRs and other low-power reactor fee classes; once 
quantifiable data for SMRs becomes available, the NRC will then 
reevaluate its minimum fee methodology to ensure that it remains sound. 
No change was made to the rule in response to this comment.
    Comment: One commenter states that it appears the NRC has concluded 
that some SMRs may not be economically viable if they pay for the 
regulatory services they consume; and this is not a compelling reason 
for the NRC to seek to subsidize the regulatory cost of SMRs with 
increased fees on another fee class. The commenter encourages the NRC 
staff to consider alternatives that more clearly align the proposed 
annual fee for SMRs with the regulatory services they use. The 
commenter suggests that the NRC create a fee class combining 
alternatives 3 and 4 from the draft regulatory analysis or create a 
separate fee class as described in Alternative 3, but with the sliding 
fee scale described in Alternative 4. The latter alternative would 
address the NRC staff's primary concern that all SMRs pay the same fee 
regardless of output. (Westinghouse)
    Response: The NRC disagrees with the comment. First, the NRC did 
not state that SMRs may not be economically viable if they pay for the 
regulatory services they consume. Rather, the NRC's proposed rule and 
proposed regulatory analysis explained that charging large and flat 
annual fees to very small SMRs may not satisfy OBRA-90's requirement to 
establish a fair and equitable fee schedule. The variable fee 
methodology selected in this final rule offers the best means of 
satisfying those OBRA-90 requirement for all operating reactors, 
including future SMRs. Further, the commenter's proposal to combine 
features of Alternatives 3 (a separate fee class) and 4 (a sliding fee 
scale) by creating a new fee class is not a viable option at this time. 
As mentioned elsewhere in this document and in the regulatory analysis, 
the NRC lacks quanititative data that shows the estimated costs of 
providing generic regulatory services to SMRs. Right now, the NRC must 
establish the variable sliding fee scale within the operating reactor 
fee class--thereby linking SMR fees to the existing fleet's fees--
because the absence of this data means that the NRC cannot anchor SMR 
fees in any other way. As cost data and operating experience for SMRs 
are accumulated, the NRC will propose adjustments to fees as needed to 
make sure that the fees charged to SMRs (and to all operating reactors) 
are commensurate with the regulatory support services provided by the 
NRC to meet the requirements of OBRA-90. At that time, it may be be 
necessary to ``de-link'' SMR fees from the existing fleet's fees and 
establish a brand new variable fee class similar to what the commenter 
proposed. No change was made to the rule in response to this comment.

C. Regulatory Analysis

    Comment: One commenter stated that, in the draft regulatory 
analysis, an equation on page 16 of the calculation

[[Page 32624]]

is not clear and could be interpreted to be inconsistent with the 
detailed process for calculating the maximum fee, which is described in 
more detail in Attachment A. The commenter suggested that the NRC 
revise the numerator of the equation to calculate the ``maximum fee'' 
to read, ``Total Part 171 Annual Fee (less all minimum and variable SMR 
fees).'' (NEI)
    Response: The NRC agrees with commenter that the equations on page 
16 of the RA were not clearly aligned with the Attachment A description 
of the step-by-step 10 CFR part 171 annual fee process. As further 
described in the regulatory analysis, calculating the maximum fee to be 
paid by the operating fleet reactors and SMR bundled units rated > 
2,000 MWt is an iterative, dynamic process. Because the equations on 
page 16 of the RA did not accurately reflect the dynamic nature of 
these calculations, the NRC removed those equations to eliminate 
potential confusion between the original simplified equations and the 
iterative calculation process referenced in Attachment A. Further, the 
NRC refined the step-by-step calculation process in Attachment A to 
achieve greater clarity. These changes bring the descriptive text and 
calculation process into closer alignment with the conceptual fee 
representation in Figure 3 of the regulatory analysis. A change was 
made to the regulatory analysis in response to this comment.
    Comment: The commenter believes that the regulatory analysis should 
explain in more detail NRC's assumption that SMRs, through a 
combination of simplicity, advanced safety features, and modular 
construction methods, will require less oversight and regulatory 
services than the current fleet of reactors. (Westinghouse)
    Response. The NRC disagrees that the regulatory analysis should 
provide more detail on NRC's assumptions for SMRs and believes that the 
commenter has overstated the NRC's basis for promulgating the proposed 
rulemaking. The Executive Summary of the proposed rule discussed 
potential SMR characteristics, and stated, ``These characteristics 
include modular design, factory component fabrication, and thermal 
power capacities of 1,000 megawatts thermal (MWt) or less per module. 
These SMRs also may include safety and security design in a lower 
regulatory oversight burden for this type of reactor.'' In fact, the 
lack of operational data on costs for these future reactor plants was 
the main reason for using a qualitative approach in the regulatory 
analysis. The NRC staff agrees with the commenter that the SMR variable 
annual fee rule should be re-assessed once operational cost data is 
accumulated. To this end, the NRC staff proposed periodic assessments 
of the actual costs associated with licensed SMRs so that the NRC could 
make adjustments to the SMR fee structure, if necessary. As the 
industry and the NRC gathers operating experience with SMRs, a better 
understanding of ``. . . how design features may be translated into 
annual fee reductions,'' as mentioned by the commenter, should become 
more apparent. SMR operating experience data should provide insights 
that could confirm correlations between design features and the level 
of NRC oversight typically needed for these new types of power plants; 
and provide indications of whether further fee adjustments for SMRs are 
required. No change was made to the regulatory analysis in response to 
this comment.

D. Other

Issuance of Final Rule
    Comment: Several commenters encouraged prompt finalization of the 
proposed rule. (UPower Technologies, NuScale, NEI, UAMPS)
    Response: The NRC agrees with the commenters. No change was made to 
the final rule in response to this comment.
Support of Proposed Rule
    Comment: Most commenters support the NRC's proposal to assess 
annual fees for SMRs licensees based on the total thermal power output 
of the facility because it is a reasonable approach for providing a 
fair and equitable fee structure for SMRs in absence of data on 
regulatory costs on oversight for SMRs. (University of California--
Berkeley, MIT, UPower Technologies, UAMPS, Nuscale, NEI)
    Response: No response required. No change was made to the final 
rule in response to this comment.
    Comment: One commenter stated that the proposed use of cumulative 
thermal power rating provides the most appropriate basis for 
establishing the fee because the rate of the production of fission 
product which creates the most important hazard associated with fission 
power is directly proportional to cumulative reactor thermal power, and 
therefore to the total source term that might be mobilized in a reactor 
accident. The SMRs provide higher intrinisic safety because this source 
term is divided into smaller quantities, reducing the maximum release 
possible if an accident occurs in a reactor unit. The same commenter 
stated SMR designs also can be expected to make more extensive use of 
intrinsic feedback and passive safety features, significantly reducing 
the complexity and inspection requirements for reactor safety systems 
compared to existing large light water reactors. (University of 
California--Berkeley)
    Response: The NRC agrees that SMRs could have some or all of the 
design and operational advantages identified by the commenter. However, 
the NRC has not yet received any SMR application for review. Therefore, 
we have no basis on which to correlate or assess the SMR attributes and 
potential advantages cited in the comment with a specific SMR design. 
No change was made to the final rule in response to this comment.
    Comment: Some commenters stated that the proposed rule provides a 
more equitable basis for assessing 10 CFR part 171 fees for SMRs that 
incorporate enhanced and design safety features which are expected to 
lower generic regulatory and oversight costs. (NEI, NuScale, UAMPS)
    Response: No response required. No change was made to the final 
rule in response to this comment.
    Comment: One commenter stated that the current disparity in annual 
fees between current light water reactors and small modular reactors is 
a key business consideration affecting the overall economics of the 
Carbon Free Power Project. (UAMPS)
    Response: No response required. No change was made to the final 
rule in response to this comment.
    Comment: One commenter believes the rulemaking provides clarity on 
10 CFR part 171 fees that support near-term business decisions 
regarding submittal of combined license applications for NuScale's 
customers, the first of which is anticipated in late 2017 or early 
2018. (Nuscale)
    Response: No response required. No change was made to the final 
rule in response to this comment.
Reevaluation of Variable Annual Fee Structure for SMRs
    Comment: Several commenters stated the NRC should state in the 
final rulemaking package (e.g., in the statements of consideration or 
in a separately issued Commission paper) its commitment to reviewing 
data on costs of oversight for SMRs as it becomes available and 
adjusting the SMR variable fee structure to ensure the annual fees 
equitably align with the cost of oversight of this class of reactors. 
One commenter stated that the appropriate timeframe for revisiting 10 
CFR part 171 fees may be approximately three years after commercial 
operation date for the

[[Page 32625]]

first reactor. The commenter believes this timeframe, with the 
deployment of a NuScale design with 12 reactors, would provide the 
operational experience of having undertaken 12 refuelings and would 
better inform the level of regulatory oversight required by the NRC for 
this type of design. Another commenter stated that the NRC should, in 
the ``Final Regulatory Basis for Proposed Changes to 10 CFR part 171,'' 
clearly and explicitly identify assumptions important to forming the 
basis for the final variable fee rule for SMRs. Another commenter 
suggested reevaluation of the fee structure for advanced reactors may 
be warranted as cost of oversight information becomes available. (NEI, 
NuScale, UAMPS, UPower Technologies)
    Response: The NRC agrees that it will be necessary to reevaluate 
the variable annual fee structure for SMRs as an SMR becomes 
operational and regulatory cost data becomes available to ensure the 
continuing satisfaction of OBRA-90 requirements. Because the NRC cannot 
anticipate with certainty when sufficient information will be 
available, the NRC is unable to estimate the precise time period when 
this reevaulation will occur. The type of information that the NRC will 
likely need to reevaluate the variable fee structure may include data 
on the initial licensing of an SMR facility, performance of refueling 
outages, performance of onsite inspections, and licensing actions and 
other regulatory services provided to an operational SMR. No change was 
made to the final rule or regulatory analysis in response to this 
comment.
Small Modular Reactor Definition
    Comment: Two commenters suggested the the NRC expand the small 
modular reactor definition of light water reactor to include all types 
of new fission reactor (e.g. sodium cooled, molten salt, etc.) One of 
the commenters suggested that if the NRC were to include non-light 
water reactors in the definition, the NRC should look to the Gen IV 
International Forum for a better one as the United States, 
International Atomic Energy Agency and the Organisation for Economic 
Co-operation and Development's Nuclear Energy Agency are all members of 
the Gen IV International Forum. (MIT, University of CA, Berkeley)
    Response: The NRC disagrees with the comment. The NRC has chosen to 
limit the scope of this proposed rule to light-water SMRs. This is 
because the light-water SMR designs that have been discussed with the 
NRC in pre-application discussions to date are similar to the current 
U.S. operating fleet of reactors in terms of physical configuration, 
operational characteristics, and applicability to the NRC's existing 
regulatory framework. The NRC may consider the inclusion of non-light 
water SMRs in a future rulemaking once the agency has increased 
understanding of these factors with respect to non-light water designs. 
No change was made to the final rule in response to this comment.

E. Out-of-Scope Comments

    Comment: The NRC should consider seeking limited legislative relief 
from OBRA-90. SMRs are not anticipated to be licensed for another 
decade, and the NRC would have to time find other legislative 
solutions. (Westinghouse)
    Response: The NRC considers this comment to be outside the scope of 
this rulemaking amending the current annual fee structure for SMRs. 
Additionally, the NRC considers this technical rulemaking to be an 
inappropriate vehicle for seeking legislative relief for SMRs under the 
requirements of OBRA-90. Apart from this rulemaking, the NRC annually 
promulgates a rulemaking to adjust its fees without changing the 
underlying principles of its fee policy to comply with the statutory 
requirements for cost recovery in OBRA-90 and the AEA. Small modular 
reactors may require lower regulatory oversight burden compared to the 
existing fleet due to potentially unique design features and safety 
attributes. Because the NRC is implementing a variable annual fee 
structure for SMRs which would comply with the fairness and equitable 
distribution of fees' requirement under OBRA-90, a request for 
legislative relief by the NRC is unnecessary. Finally, as discussed in 
SECY-15-0044, the staff's recommended alternative for establishing an 
SMR variable annual fee rule supports the agency's goals of 
transparency and providing regulatory certainty to potential SMR 
applicants. The commenter's recommendation of finding other legislative 
solutuions would likely take considerable additional time and decrease 
regulatory certainty for these potential applicants. Therefore, no 
change was made to the final rule in response to this comment.
    Comment: One commenter stated because of the ongoing 
decommissioning of a large number of U.S. power reactors and the 
uncertain production of SMR units, the NRC should ask Congress to 
change their funding system. Instead of relying heavily on fees from 
power plant operators, a significant portion of the funding should be 
allocated by Congress. The same commenter believes collecting operating 
reactor fees creates a conflict of interest. As more aging reactors 
shut down, there is a potential for budget shortfall, yet the NRC's 
workload will increase for supervising decommissioning and defunct 
nuclear sites that fall under its authority. (Private Citizen)
    Response: The NRC considers this comment to be outside the scope 
because this final rule does not seek to change the fee collection 
requirements under OBRA-90. Instead, this final rule is implementing a 
variable annual fee structure that is fair and equitable to SMRs, 
unlike the current annual fee structure. The requirements in OBRA-90 
authorize the NRC to collect approximately 90 percent of its budget 
authority through fees assessed to licensees and applicants for 
services provided by the NRC. Additonally, OBRA-90 instructs the NRC to 
``establish, by rule, a schedule of charges fairly and equitably 
allocating'' various generic agency regulatory costs ``among 
licensees'' and, ``[t]o the maximum extent practicable, the charges 
shall have a reasonable relationship to the cost of providing 
regulatory services and may be based on the allocation of the 
Commission's resources among licensees or classes of licensees.'' The 
hourly fees assessed to an operating reactor licensee which could 
include a decommissioning reactor recoup the NRC's cost for services 
such as licensing and inspection activities which benefit the licensee. 
The annual fees assessed to the operating reactor fleet recoup the 
NRC's cost for services such as research and other generic activities 
which benefit the entire fee class. Regarding a potential budget 
shortfall, the NRC requests from Congress only those resources 
necessary to conduct programs and activities which are efficient and 
effective to comply with the agency's mission. No change was made to 
the final rule in response to this comment.
    Comment: One commenter mentioned that ThorCon signed a memorandum 
of understanding with Indonesia to build their Gen-4 molten salt 
reactor prototype in that nation, and it would be shameful if a trend 
began where several SMRs were initially developed within the USA, but 
tested and built in other countries. Importing our own technology is 
not what made the USA a great nation. (Private Citizen)
    Response: The NRC considers this comment to be outside the scope of 
this rulemaking amending the current annual fee structure for SMRs. 
This final rule addresses the assessment of annual

[[Page 32626]]

fees for future SMRs (defined as light-water reactors for the purposes 
of this rulemaking) using the implementation of a variable annual fee 
structure for SMRs Therefore, this comment, which is based on the fee 
treatment of future non-LWRs, is not applicable in this context. No 
change was made to the final rule in response to this comment.
    Comment: One commenter believes NRC's Project Aim is the best near-
term option to reduce fees for classes of NRC licensees and encourage 
NRC's timely completion of this initiative. (Westinghouse)
    Response: The NRC considers this comment to be outside the scope of 
this rulemaking because this final rule is limited to the assessment of 
annual fees to SMRs only as it relates to OBRA-90. Therefore, the NRC's 
efforts under Project Aim such as improving transparency and 
simplification of how the NRC computes fees are not being considered 
under this final rule. No change was made to the final rule in response 
to this comment.

V. Discussion of Amendments by Section

    The following paragraphs describe the specific changes made by this 
rulemaking.

Section 170.3 Definitions

    The NRC is adding definitions for ``small modular reactor (SMR),'' 
and ``small modular reactor site (SMR site).''

Section 171.5 Definitions

    The NRC is adding definitions for ``bundled unit,'' ``maximum 
fee,'' ``minimum fee,'' ``small modular reactor (SMR),'' ``small 
modular reactor site (SMR site),'' ``variable fee,'' and ``variable 
rate.''

Section 171.15 Annual Fees: Reactor Licenses and Independent Spent Fuel 
Storage Licenses

    The NRC is redesignating current paragraph (e) as new paragraph (f) 
and adding new paragraphs (e)(1), (e)(2), and (e)(3) to define 
activities that comprise SMR annual fees and the time period in which 
the NRC must collect annual fees from SMR licensees.

VI. Regulatory Flexibility Certification

    Under the Regulatory Flexibility Act (5 U.S.C. 605(b)), the NRC 
certifies that this rule does not have a significant economic impact on 
a substantial number of small entities. This final rule affects only 
the licensing and operation of nuclear power plants. The companies that 
own these plants do not fall within the scope of the definition of 
``small entities'' set forth in the Regulatory Flexibility Act or the 
size standards established by the NRC (10 CFR 2.810).

VII. Regulatory Analysis

    The NRC has prepared a regulatory analysis for this final rule. The 
analysis examines the costs and benefits of the alternatives considered 
by the NRC. The regulatory analysis is available as indicated in the 
``Availability of Documents'' section of this document.

VIII. Backfitting and Issue Finality

    The NRC has determined that the backfit rule, 10 CFR 50.109, does 
not apply to this final rule and that a backfit analysis is not 
required. A backfit analysis is not required because these amendments 
do not require the modification of, or addition to, systems, 
structures, components, or the design of a facility, or the design 
approval or manufacturing license for a facility, or the procedures or 
organization required to design, construct, or operate a facility.

IX. Plain Writing

    The Plain Writing Act of 2010 (Pub. L. 111-274) requires Federal 
agencies to write documents in a clear, concise, and well-organized 
manner. The NRC has written this document to be consistent with the 
Plain Writing Act as well as the Presidential Memorandum, ``Plain 
Language in Government Writing,'' published June 10, 1998 (63 FR 
31883).

X. National Environmental Policy Act

    The NRC has determined that this final rule is the type of action 
described in 10 CFR 51.22(c)(1). Therefore, neither an environmental 
impact statement nor environmental assessment has been prepared for 
this final rule.

XI. Paperwork Reduction Act

    This final rule does not contain a collection of information as 
defined in the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) 
and, therefore, is not subject to the requirements of the Paperwork 
Reduction Act of 1995.

XII. Congressional Review Act

    This final rule is a rule as defined in the Congressional Review 
Act (5 U.S.C. 801-808). However, the Office of Management and Budget 
has not found it to be a major rule as defined in the Congressional 
Review Act.

XIII. Voluntary Consensus Standards

    The National Technology Transfer and Advancement Act of 1995, 
Public Law 104-113, requires that Federal agencies use technical 
standards that are developed or adopted by voluntary consensus 
standards bodies unless the use of such a standard is inconsistent with 
applicable law or otherwise impractical. In this final rule, the NRC 
will revise its licensing, inspection, and annual fee regulations to 
establish a variable annual fee structure for SMRs. This action does 
not constitute the establishment of a standard that contains generally 
applicable requirements.

XIV. Availability of Documents

    The documents identified in the following table are available to 
interested persons through one or more of the following methods, as 
indicated.

------------------------------------------------------------------------
                                          ADAMS Accession No./Federal
              Document                         Register citation
------------------------------------------------------------------------
Notice of Proposed Rulemaking for a   80 FR 68268
 Variable Annual Fee Structure for
 Small Modular Reactors, dated
 November 4, 2015.
Advanced Notice of Proposed           74 FR 12735
 Rulemaking (ANPR) for a Variable
 Annual Fee Structure for Power
 Reactors, dated March 25, 2009.
Summary of ANPR Comments............  ML14307A812
SECY-09-0137, ``Next Steps for        ML092660166
 Advance Notice of Proposed
 Rulemaking on Variable Annual Fee
 Structure for Power Reactors,''
 dated September 23, 2009.
ANS Position Paper, ``Interim Report  ML110040946
 of the American Nuclear Society
 President's Special Committee on
 Small and Medium Sized Reactor
 (SMR) Generic Licensing Issues,''
 dated July 2010.
SRM for SECY[dash]09[dash]0137,       ML092861070
 ``Staff Requirements--SECY-09-0137--
 Next Steps for Advance Notice of
 Proposed Rulemaking on Variable
 Annual Fee Structure for Power
 Reactors,'' dated October 13, 2009.
NEI Position Paper, ``NRC Annual Fee  ML103070148
 Assessment for Small Reactors,''
 dated October 2010.
Informational Memorandum to the       ML110380251
 Commission, ``Resolution of Issue
 Regarding Variable Annual Fee
 Structure for Small and Medium-
 Sized Nuclear Power Reactors,''
 dated February 7, 2011.

[[Page 32627]]

 
SECY-15-0044, ``Proposed Variable     ML15051A092
 Annual Fee Structure for Small
 Modular Reactors,'' dated March 27,
 2015.
SRM for SECY-15-0044, ``Proposed      ML15135A427
 Variable Annual Fee Structure for
 Small Modular Reactors'' dated May
 15, 2015.
Draft Regulatory Analysis for         ML15226A588
 Proposed Changes to 10 CFR Part 171
 ``Annual Fees for Reactor Licenses
 and Fuel Cycle Licenses and
 Materials Licenses, Including
 Holders of Certificates of
 Compliance, Registrations, and
 Quality Assurance Program Approvals
 and Government Agencies Licensed by
 the NRC,'' dated October 6, 2015.
SECY-11-0079, ``License Structure     ML110620459
 for Multi-Module Facilities Related
 to Small Modular Nuclear Power
 Reactors'', dated June 12, 2011.
Regulatory Analysis for Changes to    ML16054A285
 the Final Rule Amending 10 CFR Part
 171, ``Annual Fees for Reactor
 Licenses and Fuel Cycle Licenses
 and Materials Licenses, Including
 Holders of Certificates of
 Compliance, Registrations, and
 Quality Assurance Program Approvals
 and Government Agencies Licensed by
 the NRC''.
------------------------------------------------------------------------

List of Subjects

10 CFR Part 170

    Byproduct material, Import and export licenses, Intergovernmental 
relations, Non-payment penalties, Nuclear energy, Nuclear materials, 
Nuclear power plants and reactors, Source material, Special nuclear 
material.

10 CFR Part 171

    Annual charges, Byproduct material, Holders of certificates, 
registrations, approvals, Intergovernmental relations, Nonpayment 
penalties, Nuclear materials, Nuclear power plants and reactors, Source 
material, Special nuclear material.

    For the reasons set out in the preamble and under the authority of 
the Atomic Energy Act of 1954, as amended; the Energy Reorganization 
Act of 1974, as amended; and 5 U.S.C. 552 and 553, the NRC is adopting 
the following amendments to 10 CFR parts 170 and 171:

PART 170--FEES FOR FACILITIES, MATERIALS, IMPORT AND EXPORT 
LICENSES, AND OTHER REGULATORY SERVICES UNDER THE ATOMIC ENERGY ACT 
OF 1954, AS AMENDED

0
1. The authority citation for part 170 continues to read as follows:

    Authority: Atomic Energy Act of 1954, secs. 11, 161(w) (42 
U.S.C. 2014, 2201(w)); Energy Reorganization Act of 1974, sec. 201 
(42 U.S.C. 5841); 42 U.S.C. 2214; 31 U.S.C. 901, 902, 9701; 44 
U.S.C. 3504 note.


0
2. In Sec.  170.3, add in alphabetical order the definitions for small 
modular reactor (SMR) and small modular reactor site (SMR site) to read 
as follows:


Sec.  170.3  Definitions.

* * * * *
    Small modular reactor (SMR) for the purposes of calculating fees, 
means the class of light-water power reactors having a licensed thermal 
power rating less than or equal to 1,000 MWt per module. This rating is 
based on the thermal power equivalent of a light-water SMR with an 
electrical power generating capacity of 300 MWe or less per module.
    Small modular reactor site (SMR site) is the geographically bounded 
location of one or more SMRs and a basis on which SMR fees are 
calculated.
* * * * *

PART 171--ANNUAL FEES FOR REACTOR LICENSES AND FUEL CYCLE LICENSES 
AND MATERIALS LICENSES, INCLUDING HOLDERS OF CERTIFICATES OF 
COMPLIANCE, REGISTRATIONS, AND QUALITY ASSURANCE PROGRAM APPROVALS 
AND GOVERNMENT AGENCIES LICENSED BY THE NRC

0
3. The authority citation for part 171 continues to read as follows:

    Authority:  Atomic Energy Act of 1954, secs. 11, 161(w), 223, 
234 (42 U.S.C. 2014, 2201(w), 2273, 2282); Energy Reorganization Act 
of 1974, sec. 201 (42 U.S.C. 5841); 42 U.S.C. 2214; 44 U.S.C. 3504 
note.


0
4. In Sec.  171.5, add in alphabetical order the definitions for 
bundled unit, maximum fee, minimum fee, small modular reactor (SMR), 
small modular reactor site (SMR site), variable fee and variable rate 
to read as follows:


Sec.  171.5  Definitions.

* * * * *
    Bundled unit means the cumulative licensed thermal power rating of 
a number of SMR reactors on the same site that, for 10 CFR part 171 
purposes only, is considered a single fee unit. The maximum capacity of 
a bundled unit is 4,500 MWt. A single SMR reactor can be part of two 
bundled units if it completes the capacity of one unit and begins the 
capacity of an additional unit. For a given site, the use of the 
bundled unit concept is independent of the number of SMR plants, the 
number of SMR licenses issued, or the sequencing of the SMR licenses 
that have been issued. The first bundled unit on a site is assessed a 
minimum fee for capacity less than or equal to 250 MWt, plus a variable 
fee for capacity greater than 250 MWt and less than or equal to 2,000 
MWt. Bundled units with capacities greater than 2,000 MWt and less than 
or equal to 4,500 MWt are assessed a maximum fee that is equivalent to 
the annual fee paid by the current reactor fleet. The maximum fee 
replaces the minimum and variable fee for the first bundled unit. Each 
additional increment of 4,500 MWt of SMR capacity on the same site 
constitutes an additional bundled unit. No minimum fee is assessed to 
additional bundled units. For any additional bundled unit, a variable 
fee applies to capacities less than or equal to 2,000 MWt and the 
maximum fee applies to capacities greater than 2,000 MWt and less than 
or equal to 4,500 MWT. For additional bundled units, the maximum fee 
replaces the variable fee.
* * * * *
    Maximum fee is the highest fee paid by a single bundled unit. It is 
applied to all bundled units on an SMR site with a licensed thermal 
power rating greater than 2,000 MWt and less than or equal to 4,500 MWt 
and is equal to the flat annual fee paid by existing fleet power 
reactors.
    Minimum fee means one annual fee component paid by the first 
bundled unit on a site with a cumulative licensed thermal power rating 
of 2,000 MWt or less. For the first bundled unit on a site with a 
licensed thermal power rating of 250 MWt or less, it is the only annual 
fee that a licensee pays.
* * * * *
    Small modular reactor (SMR) for the purposes of calculating fees, 
means the class of light-water power reactors having a licensed thermal 
power rating less than or equal to 1,000 MWt per module. This rating is 
based on the thermal power equivalent of a light-water SMR with an 
electrical power generating capacity of 300 MWe or less per module.
    Small modular reactor site (SMR site) is the geographically bounded 
location

[[Page 32628]]

of one or more SMRs and a basis on which SMR fees are calculated.
* * * * *
    Variable fee means the annual fee component paid by the first 
bundled unit on a site with a licensed thermal power rating greater 
than 250 MWt and less than or equal to 2,000 MWt; or the annual fee 
component paid by additional bundled units on a site that have a 
licensed thermal power rating of less than or equal to 2,000 MWt. The 
variable fee is the product of the bundled unit thermal power capacity 
(in the applicable range) and the variable rate.
    Variable rate means a per-MWt fee factor applied to all bundled 
units on site with a licensed thermal power rating less than or equal 
to 2,000 MWt. For the first bundled unit on a site with a licensed 
thermal power rating greater than 250 MWt and or less than or equal to 
2,000 MWt, the variable rate is based on the difference between the 
maximum fee and the minimum fee, divided by 1,750 MWt (the variable fee 
licensed thermal rating range). For additional bundled units with a 
licensed thermal power rating less than or equal to 2,000 MWt, the 
variable rate is based on the maximum fee divided by 2,000 MWt.

0
5. In Sec.  171.15, redesignate paragraph (e) as paragraph (f) and add 
new paragraph (e) to read as follows:


Sec.  171.15  Annual fees: Reactor licenses and independent spent fuel 
storage licenses.

* * * * *
    (e)(1) Each person holding an operating license for an SMR issued 
under 10 CFR part 50 of this chapter or a combined license issued under 
10 CFR part 52 after the Commission has made the finding under 10 CFR 
52.103(g), shall pay the annual fee for all licenses held for an SMR 
site. The annual fee will be determined using the cumulative licensed 
thermal power rating of all SMR units and the bundled unit concept, 
during the fiscal year in which the fee is due. For a given site, the 
use of the bundled unit concept is independent of the number of SMR 
plants, the number of SMR licenses issued, or the sequencing of the SMR 
licenses that have been issued.
    (2) The annual fees for a small modular reactor(s) located on a 
single site to be collected by September 30 of each year, are as 
follows:

----------------------------------------------------------------------------------------------------------------
  Bundled unit thermal power rating          Minimum fee              Variable fee             Maximum fee
----------------------------------------------------------------------------------------------------------------
First Bundled Unit
    0 MWt <=250 MWt.................  TBD                       N/A                      N/A
    >250 MWt <=2,000 MWt............  TBD                       TBD                      N/A
    >2,000 MWt <=4,500 MWt..........  N/A                       N/A                      TBD
Additional Bundled Units
    0 MWt <=2,000 MWt...............  N/A                       TBD                      N/A
    >2,000 MWt <=4,500 MWt..........  N/A                       N/A                      TBD
----------------------------------------------------------------------------------------------------------------

    (3) The annual fee for an SMR collected under paragraph (e) of this 
section is in lieu of any fee otherwise required under paragraph (b) of 
this section. The annual fee under paragraph (e) of this section covers 
the same activities listed for power reactor base annual fee and spent 
fuel storage/reactor decommissioning reactor fee.
* * * * *

    Dated at Rockville, Maryland, this 6th day of May.

    For the Nuclear Regulatory Commission.
Maureen E. Wylie,
Chief Financial Officer.
[FR Doc. 2016-11975 Filed 5-23-16; 8:45 am]
 BILLING CODE 7590-01-P