Can New York Regulate the Disposal of NRC-Licensed Byproduct Material by Decommissioning Power Plants?

This article originally was published by the American Bar Association’s Section of Environment, Energy, and Resources (SEER).

Lead-in: New York’s arguments before the Second Circuit rest upon novel interpretations of Supreme Court precedent governing Atomic Energy Act preemption.

Summary bullets:

• New York has appealed a federal district court’s ruling that its ban on the disposal of tritiated water into the Hudson River is preempted.
• New York’s reliance on economic justifications for its statute obscures the radiological safety motivation underlying its concerns.
• The state ignores the Supreme Court’s recognition that regulation of matters over which state has plenary authority can have preempted effects on nuclear facility operations.

On January 26, 2026, the State of New York filed its brief to the Second Circuit in Holtec International v. State of New York. New York challenges a district court’s declaratory judgment that a 2023 statute prohibiting the discharge of radiological substances into the Hudson River by a decommissioning nuclear plant is preempted by the Atomic Energy Act (AEA). New York’s brief raises several arguments that substantially contradict the prevailing framework through which the Supreme Court and lower courts have considered AEA preemption claims.

The statute at issue relates solely to the Indian Point Energy Center, a three-unit nuclear power plant in Westchester County, New York, which is currently in the process of decommissioning. Holtec, now the owner of Indian Point, seeks to dispose of wastewater stemming from plant operations that contains trace amounts of tritium. While the plant was generating electricity, the operators of Indian Point disposed of water into the river consistent with the plant’s licenses and U.S. Nuclear Regulatory Commission regulations. Holtec intends to continue this disposal method as it completes decommissioning.

The district court adopted a two-prong test, originally articulated in Williams v. BHI Energy I Power Services LLC, to evaluate Holtec’s assertion that the New York statute is preempted. First, relying on Virginia Uranium v. Warren, the court endorsed the view that a state law that regulates a “core activity” described in 42 U.S.C. § 2021(c)––i.e., an activity for which the National Regulatory Commission (NRC) cannot discontinue its regulatory authority pursuant to its Agreement State program, as governed by 42 U.S.C. § 2021––is preempted only if it was enacted for the purpose of addressing nuclear safety. Second, relying on English v. General Electric Company, the court adopted Williams’s observation that “regardless of whether the state law regulates a core activity, it can still be preempted if it has a ‘direct and substantial effect’ on the radiological safety decisions of those who construct or operate nuclear facilities.”

On the first prong, the district court determined that, while disposal of wastewater from plant operations was a “core activity” within the meaning of section 2021(c), it could not conclude (even though it was a “close call”) that the primary purpose underlying the statute was a concern for nuclear safety. And, on the second prong, it determined that, even if it were possible for Holtec to forego the historical and NRC-approved practice of disposing of wastewater into the Hudson River, “by requiring Holtec to change the method by which it disposes of tritiated water,” the New York statute “directly and substantially [a]ffects decisions concerning radiological safety levels” and is therefore preempted under English.

Though ultimately agreeing with the district court’s ruling that the statute is not preempted under the first prong of the Williams inquiry, New York disputes that the district court even needed to address the question. Specifically, it contests the conclusion that the regulation of wastewater disposal is a “core activity” regulated by the NRC under the Atomic Energy Act, asserting that section 2021(c)(4) only describes a “core activity” inasmuch as it regulates the disposal of material creating “special hazards.” Any other reading, New York contends, would render section 2021(b)––which permits the discontinuation of federal authority over nuclear materials––superfluous. (“If all byproduct of any licensed nuclear facility were excluded from state authority by section 2021(c)(4), it would make no sense to include byproduct among the materials over which States could exercise authority in § 2021(b)(1).”) But this argument ignores the fact that section 2021(c)(4) only applies to the “disposal,” as opposed to the possession or transfer of nuclear materials, and it is therefore possible to interpret section 2021(c) in a manner that gives effect to section 2021(b)(1). In any event, the NRC has determined that disposal of any licensed material–even material that is within regulatory limits set by the United States Environmental Protection Agency––does, in fact, require a license. And, although Holtec appears not to have pressed the argument, the process of decommissioning a power plant is one of the activities authorized by operating licenses for utilization facilities issued under 10 C.F.R. Part 50 and therefore falls within a separate category of core activities identified in section 2021(c)(1).

New York’s defense of the district court’s conclusion on prong 1 echoes the court’s distinction between economic rationales for legislation (which are not preempted pursuant to the Supreme Court’s decision in Pacific Gas & Elec. Co. v. State Energy Resource Conservation & Development Commission) and nuclear-safety rationales (which the Supreme Court has deemed preempted). Specifically, New York asserts that “[t]he sole stated purpose of the law is to address economic concerns with wastewater discharges in the Hudson River that could harm real estate values and economic development,  . . . not to address nuclear safety of wastewater discharges that are undisputedly safe, with radiation levels a thousand times below the safe limit.” Yet this distinction, which itself relies on New York’s self-serving statement of its own motivation, is itself dubious––any asserted harm to real estate values and economic development stems exclusively from perceptions (regardless of their accuracy) about radiological safety, and such harm ultimately derives from the fact that radiologically significant materials can be dangerous. Indeed, categorizing the concerns identified by the state as “economic” obscures the fact that the statute, by its terms, only applies to nuclear power plants, as opposed to other potential disposers of hazardous material into the Hudson River, and only applies to “radiological substance[s].” And the Supreme Court rejected an analogous argument in Metropolitan Edison Co. v. People Against Nuclear Energy when it determined that, for purposes of identifying impacts that an agency must consider under the National Environmental Policy Act, evaluation of the risk of a potential nuclear accident did not require consideration of the psychological stress caused by the fear of such risks. Ultimately, the same rationale applies here––any economic harms created by the disposal of tritiated wastewater cannot meaningfully be separated from radiological safety concerns about the water itself, and those radiological safety concerns cannot form a constitutionally permissible basis for state action.

New York’s challenge to the court’s discussion and application of prong two likewise relies on arguments that are inconsistent with the case law governing AEA preemption. As an initial matter, New York rejects the district court’s conclusion that the inquiry about the effects of state regulation has any role to play at all in a preemption analysis where a statute does not address a matter that lies within the core of the NRC’s authority. But New York’s arguments fail to address case law beginning with English—which the Supreme Court did not disturb in Virginia Uranium and therefore remains valid—holding that a state’s regulation within spheres over which it retains plenary authority is preempted when it substantially affects the operation of a nuclear facility. For example, in Skull Valley Band of Goshute Indians v. Nielson, the Tenth Circuit ruled, based on English, that a pervasive ban on state-provided municipal services provided to a spent nuclear fuel storage facility would be preempted. New York, however, does not address Skull Valley.

New York also takes issue with the district court’s conclusion that the statute affects decision making concerning radiological safety levels inasmuch as it forces Holtec to employ methods to dispose of tritiated wastewater that it has not historically employed. Emphasizing that disposal of the wastewater does not present a health hazard (an odd emphasis for a party seeking to justify a ban on such activity), New York asserts that the statute is not preempted because other methods of disposal would likewise be safe and that this choice would not affect nuclear safety. But that argument rests on a very narrow interpretation of what the English Court considered preempted—fairly read, English stands for the proposition that state law cannot force the operator of a nuclear facility to choose a particular method for complying with NRC licensing and regulatory requirements. Thus, the relevant inquiry is not, as New York would have it, whether the state is forcing an NRC licensee to choose among alternatives that yield materially different levels of radiation exposure. It is, instead, whether the state law second-guesses a federal decision by requiring a licensee to forego a method of disposal that the NRC has itself sanctioned, and to adopt another method (and incur associated costs) to ensure that its operations continue to be radiologically safe. As the district court found, a state law that requires a licensee to revisit its decision as to how to ensure radiological safety directly and substantially affects nuclear power plant operations and therefore is preempted by the Atomic Energy Act.

Andrew P. Averbach served as the solicitor of the U.S. Nuclear Regulatory Commission from December 2012 through November 2025. He began working as a partner at Womble Bond Dickinson (US) LLP in March 2026.