Regulators Cleared a Small Modular Reactor for Construction. It Isn't a NuScale Design.

NuScale Power (NYSE:SMR) says it holds the only design certification the Nuclear Regulatory Commission has given a small modular reactor. Its newer US460 design, based on bigger 77-megawatt modules, also earned the agency's standard design approval in May 2025.

But the first commercial small modular reactor the NRC has approved for construction isn't a NuScale design. On Sept. 29, the regulator granted a permit for the Tennessee Valley Authority to build a 300-megawatt BWRX-300 reactor from GE Vernova (NYSE:GEV) on TVA's Clinch River site in Tennessee.

NuScale shares trade near $8 as I write, down about 86% from the $57.42 they hit a year ago. And the permit came under three weeks after UBS cut the growth stock to sell, arguing rivals were moving into construction but NuScale had no firm customer commitments.

I wouldn't buy or sell a stock over a rating change. But it's worth comparing how TVA won its permit to where NuScale's own customers are.

Image source: The Motley Fool.

A 14-month review

The NRC officially started reviewing TVA's application in July 2025 and finished in 14 months, four months ahead of schedule. And TVA already had an early site permit for Clinch River, granted in 2019.

The GE Vernova design is moving in Canada, too. Ontario Power Generation got a license to construct the first BWRX-300 in April 2025, and nuclear construction is now underway at its Darlington site.

NRC records for NuScale look different. The agency lists NuScale in pre-application work for future combined license applications (the filing a utility submits to build and operate a plant) that would reference the US460 design. When it approved the design, the NRC said that anyone wanting to use it would still need to apply to build and operate a reactor. None has done that yet.

What needs to happen first?

Everything goes through ENTRA1 Energy, NuScale's exclusive commercialization partner. In September 2025, ENTRA1 and TVA signed a non-binding agreement for up to 6 gigawatts of capacity from NuScale's power modules, billed partly as power for artificial intelligence (AI) data centers. As of NuScale's second-quarter report in August, ENTRA1 was still working toward a definitive power purchase agreement with TVA.

The license application itself waits for that agreement. On NuScale's second-quarter earnings call, CEO John Hopkins said one of the first steps once power purchase agreements are in place would be starting the license application with the customer. He added that around 60% of the application work done for a scrapped Utah project could be reused.

So even a signed deal probably leaves NuScale's customer with an application to finish and file, and a federal review that, at TVA's pace, could run over a year. Under NuScale's partnership terms, a binding agreement also triggers NuScale's next milestone payment to ENTRA1 (35% of the total it could owe) before any reactor revenue comes in.

Revenue has almost dried up

Meanwhile, the revenue NuScale does report keeps dropping, from $8.2 million in 2025's third quarter to around $1.8 million in the fourth. Then it slid to $565,000 in the first quarter of 2026 and just $75,000 in the second, compared to $8.1 million a year earlier. Most of the older revenue was from engineering work for a planned plant in Romania, which finished in late 2025. And a pricing agreement with the project's prime contractor for that work cut second-quarter revenue by $176,000, leaving the company's power plant and module services line negative.

Romania won't close the gap soon, either. Hopkins said the Romanian project's final notice to proceed is "probably another year from now."

And losses are growing. NuScale's operating loss hit $64 million in the second quarter. That's around 49% more than a year before, and up from the $57.5 million it lost in the first quarter.

NuScale posted a net loss for each of those periods, so there's no net income to value the stock on yet.

Sure, NuScale has time -- and money. It finished June with $1.9 billion in cash and investments, around half the stock's market value of about $3.5 billion. That's probably enough to cover years of operating losses at the current rate, but a signed deal would also trigger the milestone payment to ENTRA1.

Ultimately, NuScale still has an approved design, lots of cash, and a partner negotiating with the same utility that just won the first permit. But a rival's reactor is now cleared for construction, while NuScale's route to selling one still starts with a contract that hasn't been signed.

NuScale's third-quarter call on Nov. 5 is the next chance for management to say if ENTRA1 and TVA have gotten there. Until then, I'd wait on the stock.

Daniel Sparks and his clients do not have positions in any of the stocks mentioned. The Motley Fool has positions in and recommends GE Vernova. The Motley Fool recommends NuScale Power. The Motley Fool has a disclosure policy.