Washington (Platts)--8Aug2012/302 pm EDT/1902 GMT

Approval of Duke Energy's plans to build two nuclear reactors in Florida could be delayed by the US Nuclear Regulatory Commission's decision Tuesday to put on hold decisions on granting licenses to build new reactors pending resolution of a court decision overturning NRC's waste confidence rule.

NRC has said it expects to finish the safety review of combined construction permit-operating licenses, or COLs, for two AP1000 units at the utility's Levy County, Florida, site by October.

The agency was targeting February for a mandatory hearing on the application and said it would issue final licensing decisions within four months of completing mandatory hearings.

The NRC commissioners, in an order issued Tuesday, said the agency will defer final decisions on licensing new reactors, or issuing 20-year license renewals for existing ones, until it decides how to comply with a June 8 decision by the US Court of Appeals for the District of Columbia Circuit that struck down NRC's updated waste confidence rule.

The court ruled that the NRC is required to conduct an environmental assessment of the rule and "failed to properly examine future dangers and key consequences" of storing used commercial nuclear fuel at power reactor sites for decades.

The updated rule that NRC issued in 2010 says the agency has reasonable assurance utility spent fuel can be safely stored for at least 60 years after a power reactor's operating license expires and then disposed of. Waste confidence is central to the agency's ability to license new reactors and renew the operating licenses of existing reactors.

The order, issued in response to a petition by 24 anti-nuclear groups and activists filed with the agency June 18, said NRC is "now considering all available options for resolving the waste confidence issue." It said this could include issuing a revised generic regulation, a regulation that would assess waste nuclear fuel on a site-by site basis, or a combination of both.

Duke is confident NRC will act "in a timely manner" to address the issues raised by the court decision and resume final licensing decisions, spokeswoman Rita Sipe said in an email late Tuesday. "We are encouraged that the NRC will continue to move forward with all licensing reviews and proceedings while it considers options for resolving the waste confidence issues raised by the court's remand," Sipe said.

David McIntyre, an NRC spokesman, said Tuesday in an email that he could not estimate when NRC would promulgate a revised waste confidence rule, but said: "This is a matter of high urgency, so it is something that will be done sooner, rather than later."

Duke's application for COLs for two AP1000 reactors at its William States Lee site in South Carolina is scheduled for a mandatory hearing in March, according to NRC's website. An application for two new units at the Shearon Harris site in North Carolina should have its safety review complete by September 2013, NRC said. It has not set a target for a final decision on either of these applications.

Applications for COLs for 20 new reactors and license renewals for 13 units have been filed with NRC, according to Tuesday's order. An additional 14 license renewal applications are expected to be filed between October and early 2017, according to NRC's website.

The Tennessee Valley Authority is reviewing the NRC order for its possible impact on the Watts Bar-2 completion project now under way, spokesman Michael Bradley said in an interview Tuesday.

TVA is completing Watts Bar-2, in Tennessee, on which work had stopped in the 1980s. The federal power producer has said it plans to restart commercial operations of the unit around December 2015. NRC has not said when it plans to complete its review of the application for an operating license for the unit.

Ellen Ginsberg, the Nuclear Energy Institute's general counsel, said in an email Tuesday: "Given the circumstances created by the court's decision, the agency reasonably permitted licensing reviews and adjudications to proceed while it addresses the remand. The commission appropriately used its inherent supervisory authority to direct licensing boards to hold related contentions in abeyance pending further agency action."

Edward Kee, a vice president with NERA Economic Consulting, which does work on nuclear economics issues for US and non-US companies, said in an email Tuesday: "I see this order as a routine NRC housekeeping matter to reflect the court's decision. I expect that any delays in COL or license renewal decisions as a result of this order will have a minimal impact on the nuclear industry.

--Jim Ostroff, james_ostroff@platts.com --William Freebairn, william_freebairn@platts.com --Edited by Keiron Greenhalgh, keiron_greenhalgh@platts.com