Breaking: Nuclear Regulatory Commission Questions NuScale Risk Protections
By: Blake Spendley and Daniel Sherwood
Editor: Sam Koppelman
Based on Hunterbrook Media’s reporting, Hunterbrook Capital is short $SME at the time of publication. Positions may change at any time after publication. This is not investment advice. See full disclaimer below.
NuScale Power (NYSE: $SMR), a developer of small modular reactors, is facing increased scrutiny from the U.S. Nuclear Regulatory Commission.
The Commission sent a request for additional information about NuScale’s application for the design of its small modular reactor plant, according to a document posted by the NRC on June 10th.
The letter is a response to NuScale’s design for its keystone reactor technology. NuScale has called the plants that would use this technology “near-term deployable.”
NuScale’s market cap has more than doubled over the last six months to over $2 billion as the company has promised to use nuclear power to “meet the rapidly growing needs of data centers and AI.”
NuScale, however, has not yet commercialized any reactors. In its first quarter earnings, the company reported less than $1.4 million of revenue compared to a net loss of over $48 million, with $132 million in cash as of March 31st. NuScale also announced it had reduced its workforce by 28% earlier in 2024.
NuScale has indicated it does not “anticipate” commercializing an earlier, 50 megawatt version of its reactor that was approved by the NRC — increasing the stakes of its battle for the regulatory approval of this latest, 77 megawatt reactor.
Before the publication of the NRC’s letter with questions about NuScale’s risk mitigation plans, NuScale had said customers could “proceed with plans to develop NuScale power plants with the understanding that the NRC has approved the safety aspects of the NuScale design.”
NRC's Detailed Inquiry On Risk Mitigation
The NRC's request for additional information — first issued to NuScale on May 25, 2024 prior to the public disclosure — questioned whether NuScale has adequately justified categorizing certain systems as "non-risk significant."
This classification determines the level of regulatory oversight and quality assurance measures applied to these systems.
The NRC appears particularly concerned about NuScale’s “defense-in-depth” strategies, which are supposed to ensure that if one safety system fails, others are in place to prevent a catastrophic event.
“The NRC staff is unable to find evidence to conclude that the applicant implemented a risk-informed process,” the agency wrote. “Specifically, the NRC staff is unable to conclude that deterministic considerations and defense-in-depth were appropriately considered in the risk significance determination of SSCs.”
The NRC made four specific requests to the company. The requests range from clarifying and justifying the process for classifying the risk level of critical components to demonstrating that the Backup Power Supply System classification takes into account a comprehensive set of risk factors and safety considerations.
To adequately address these concerns, NuScale may need to reassess their risk assessment methodology, perform additional safety analyses, incorporate multiple layers of protection, and potentially make significant design changes and safety improvements. These efforts could have substantial implications for the project's timeline, costs, and overall feasibility.
Elusive Contracts and Customer Uncertainty
In November, NuScale lost a major contract with Utah power municipalities — which had reportedly been “spooked” by the company’s substantial cost overruns and delays, according to an investigation from E&E News, a Politico Publication.
NuScale has disclosed other potential customer relationships. But the credibility of these opportunities has been repeatedly questioned by short report outlet Iceberg Research since October, 2023 when it flagged that the Utah plan was at risk.
NuScale did not return Hunterbrook Media’s request for comment. In its first quarter SEC filing, the company had said it had expected that “the NRC will complete its review and SDA approval to be received by July 31, 2025.”
Blake Spendley joined Hunterbrook from the Center for Naval Analyses (CNA), where he led investigations as a Research Specialist for the Marine Corps and US Navy. He built and owns the leading open-source intelligence (OSINT) account on X/Twitter, called @OSINTTechnical (>925K followers), which now also distributes Hunterbrook Media content. His OSINT research has been published in Bloomberg, The Wall Street Journal, and The Economist, among other top business outlets. He has a BA in Political Science from USC.
Daniel Sherwood joined Hunterbrook from The Capitol Forum, a premium subscription financial publication, where he was an Editor & Senior Correspondent, writing and managing market-moving investigative reports and building the Upstream database. Prior to The Capitol Forum, Daniel has experience conducting undercover investigations into fossil fuel companies and other research. He also served as an Honors Law Clerk in the Criminal Enforcement Division of the EPA. He has a JD from Michigan State University. Daniel is based in Michigan.
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