NEW BUILD | MANAGING EPC RISK
Managing EPC contracting risk
With an anticipated boom in new US nuclear development, EPC contractors are
facing unique risks during the long project construction phase. Addressing three fundamental contracting issues can significantly reduce long-term risk exposure.
By Zachary Song and Robert Reyes Landicho, Partners, Steptoe’s International Disputes group and Joshua S Perkins, Associate, Steptoe’s Energy group.
In the aftermath of the 2011 Fukushima Daiichi disaster, the NRC issued orders in 2012 and 2013 requiring US reactors to obtain, install, and protect additional equipment and to improve venting systems. Source: OECD NEA
AS NEW NUCLEAR CONSTRUCTION gains renewed momentum in the US and worldwide, engineering, procurement and construction (EPC) contractors face a contracting landscape that differs in material ways from other energy projects. Nuclear projects involve unique regulatory, liability, and risk-allocation issues that require careful attention at the contract drafting and negotiation stage. Three key EPC contracting issues routinely arise in nuclear energy projects in the US, but early strategic positioning can significantly reduce long- term risk exposure.
Change in law provisions Change in law clauses are heavily negotiated in nuclear EPC contracts because such projects are uniquely exposed to new regulatory requirements that may emerge during the lengthy construction phase. EPC
16 | July 2026 |
www.neimagazine.com
contractors often cannot reliably factor in the risk of future regulatory changes into a fixed-price contract, because nuclear EPC projects may involve “first-of- a-kind” technologies, meaning that there is no prior design or existing equipment that can be used to assess risk. Nearly all project elements therefore need to be designed and manufactured for the first time. In practice, regulators have difficulty evaluating and permitting “first-of-a-kind” nuclear technologies and may issue new regulatory requirements, which can lead to project delays and cost increases. In the US, the Nuclear Regulatory Commission (NRC) issues hundreds of guidance documents, amendments, and licensing revisions every year, along with dozens of final rules that significantly impact nuclear technologies. It is difficult for a nuclear EPC contractor at the time of contracting to anticipate the impact of a new NRC
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