Nuclear startup sues US regulator while asking it for a Texas reactor permit

Last Energy filed the first part of a construction permit application for a reactor project in Texas on October 20 — while its lawsuit against the Nuclear Regulatory Commission, the agency that will rule on that application, sits unresolved in federal court in Tyler.

The suit, filed in December 2024 alongside Texas and Utah, challenges a 1956 rule that classifies every reactor, whatever its size, as a "utilization facility" requiring a full NRC license. Last Energy argues the Atomic Energy Act reaches only reactors critical to common defense or public health and safety. "Building a new commercial reactor of any size in the United States has become virtually impossible," said founder and chief executive Bret Kugelmass, who says the case will determine whether the agency can charge hundreds of millions of dollars in fees and enforce billions in design changes absent any safety or security concern.

Kugelmass sold a Silicon Valley drone startup in 2017 and founded Last Energy in 2019. The board includes PayPal co-founder Luke Nosek and Ripple co-founder Jed McCaleb, whose funds led its early and later financing rounds, including a $100 million Series C last year. The company has signed agreements for more than 50 reactors at sites across Europe.

Its PWR-20 is a pressurized water reactor of roughly 20 megawatts, using the same technology as most of the American commercial fleet, with fuel nearly identical to existing commercial pellets. It is designed to be built in a factory, shipped and assembled on site, and to run about six years before needing a fresh core.

The litigation has thinned. By April 2025, Louisiana, Florida, Arizona's legislature and two other reactor developers, Valar Atomics and Deep Fission, had joined; the NRC first moved to dismiss, then agreed to pause the case to "consider alternatives" — a pause that coincided with the Trump administration ordering the regulator to rewrite its rules. Since then, every state that signed on has filed to drop out, leaving the reactor developers weighing their next steps.

The new application, for a project at Texas A&M's RELLIS campus using the same reactor geometry at reduced enrichment, includes a request for a limited work authorization: permission to begin the foundation while the rest is decided. The agency reviewing it faces no penalty for another year of delay and answers for everything it approves.

Last Energy was not among the Department of Energy pilot participants that obtained criticality by the July 4th deadline.