Earlier this week, the Nuclear Regulatory Commission denied the Intervenors’ Petition for Review of an Atomic Safety and Licensing Board decision in favor of the Applicant – Nuclear Innovation North America, LLC (NINA) – on the foreign ownership, control, or domination (FOCD) contention in the South Texas new reactor proceeding. The Board had previously ruled that, despite NINA being 10% owned by Japanese Toshiba Corporation, it is not subject to impermissible FOCD because the corporate ownership and governance structures do not confer ownership, control, or domination. The Intervenors appealed the Board’s decision, but the Commission declined to grant review because the Intervenors failed to raise a substantial question of law or identify a clearly erroneous finding of fact.

The Commission found that the Board’s decision was consistent with applicable precedent, as well as the existing Standard Review Plan on FOCD. The Commission therefore reiterated the current guidance that an applicant may negate the control of a foreign investor where the applicant is not 100% indirectly foreign-owned.

The decision affirms the Commission’s earlier interpretation in the SEFOR case that the FOCD provision should be given an orientation toward national defense and security. The Intervenors argued that the Board improperly limited its FOCD review to matters of nuclear safety, security, and reliability, but the Commission disagreed. It found that the Board found no control with respect to any matter, not just safety, security, or reliability matters. Similarly, the Intervenors and NRC Staff posited that the Board erred by requiring evidence of actual control (as opposed to the ability to exercise control in the future) in order to find FOCD. But the Commission disagreed with the premise – it ruled that the Board did not find that unexercised, potential control would not amount to improper FOCD, but rather, in this case there were no potential avenues of control. On both of these issues, the Commission found no substantial issue of law warranting review.

Regarding the Board’s alleged factual errors, the Commission found that the Intervenors provided no evidence that Toshiba had never exercised control over NINA. The Intervenors also failed to demonstrate how Toshiba would subjugate NINA to its will by funding the project and failed to specify additional demands that Toshiba would make on NINA that are not already considered in the Negation Action Plan.

A Commission decision on the Staff’s “fresh assessment” of FOCD issues is still pending. The Commission explicitly noted in the South Texas decision that its rationale and conclusions regarding the arguments on appeal do not dictate the outcome of the Commission’s “fresh assessment.” But the Commission’s decision does reflect some moderation relative to where the NRC Staff has been on the FOCD issue in licensing reviews over the past few years.