States and Startups Are Suing the US Nuclear Regulatory Commission

American nuclear is in 25-year-old Isaiah Taylor’s blood: his great-grandfather worked on the Manhattan Project. In 2023, Taylor, who dropped out of high school to work in tech, started his own nuclear company, Valar Atomics. It’s currently developing a small test reactor, named after Taylor’s great-grandfather. But the company says that overly onerous regulations imposed by the US Nuclear Regulatory Commission (NRC), the country’s main regulatory body for nuclear reactors, has forced Valar Atomics to develop its test reactor overseas.

In early April, Valar Atomics, in addition to another nuclear startup, Deep Fission, as well as the states of Florida, Louisiana, and Arizona’s state legislature, signed onto a lawsuit against the NRC. The lawsuit, originally filed in December by Texas, Utah, and nuclear company Last Energy, blames the NRC for “so restrictively regulat[ing] new nuclear reactor construction that it rarely happens at all.”

The US has historically been the global powerhouse of nuclear energy, yet only three reactors have come online over the past 25 years, all behind schedule and with ballooning budgets. Meanwhile, other countries, like China and South Korea, have raced ahead with construction of reactors of all sizes. Some nuclear advocates say that the US’s regulation system, which imposes cumbersome requirements and ultra-long timelines on projects, is largely to blame for this delay—especially when it comes to developing new designs for smaller reactors—and that some reactors should be taken from the NRC’s purview altogether. But others have concerns about potential attempts to bypass the country’s nuclear regulations for specific designs.

The NRC has long been criticized for its ultra-slow permitting times, inefficient processes, and contentious back-and-forth with nuclear companies. “The regulatory relationship in the US has been described as legalistic and adversarial for nuclear,” says Nick Touran, a licensed nuclear engineer who runs the website What Is Nuclear. “That is kind of uniquely American. In other countries, like France and China, the regulators are more cooperative.”

The lawsuit takes these criticisms one step further, claiming that by regulating smaller reactors, the NRC is misreading a crucial piece of nuclear legislation. In 1954, Congress passed the Atomic Energy Act, which created modern nuclear regulation in the US. That law mandated regulations for nuclear facilities that used nuclear material “in such quantity as to be of significance to the common defense and security” or that use it “in such manner as to affect the health and safety of the public.”

“We would love the NRC to respect the law that was written,” says Taylor, who believes the reactor his company is working on sits outside of that mandate. “What it would do for us is to allow innovation to happen again. Innovation is what drives the American economy.”

“The NRC will address the litigation, as necessary, in its court filings,” agency spokesperson Scott Burnell told WIRED in an email.

While we generally think of nuclear reactors as huge power plants, reactors can be made much smaller: Models known as small modular reactors, or SMRs, usually produce a third of the energy of a larger reactor, while even smaller reactors known as microreactors are designed small enough to be hauled by semitruck. Because of their size, these reactors are inherently less dangerous than their large counterparts. There’s simply not enough power in an SMR for a Three Mile Island–style meltdown.