The US state of New Mexico on 29 March filed a 47-page lawsuit against the US Nuclear Regulatory Commission (NRC) alleging insufficient oversight of a planned nuclear fuel storage site in the state. The facility, proposed by Holtec International, would store used fuel from NPPs across the USA. In its complaint, the state argued the federal commission overstepped the bounds of its power and "rubber-stamped" Holtec's proposal. The state also accused NRC of blocking challenges from institutions that objected to the proposal.

"I am taking legal action because I want to mitigate dangers to our environment and to other energy sectors," Attorney General Hector Balderas said in a statement. "It is fundamentally unfair for our residents to bear the risks of open ended uncertainty." The filing says NRC's mandate “does not include policy setting or altering the public debate and emphatically cheerleading nuclear industry projects”. Yet it is doing both “to the detriment of New Mexico”. The complaint also identifies what it says are numerous potential safety hazards if the facility is built.

"There are at least 18 abandoned and plugged wells located on the property that could contribute to the formation of sink holes if the casing on these wells has been compromised. There is one plugged saltwater disposal well located north-cast of the property boundary that could contribute to sinkhole formation and potential subsidence," the complaint notes. "Additionally, ground subsidence related to potash mine workings, as has been documented in the region, must be evaluated in greater detail as a potential risk to the stability of the [consolidated interim storage facility] CISF facility."

New Mexico is currently the site of the only federal underground site housing nuclear waste in Carlsbad. The Holtec proposal is for a four-decade licence to build a separate facility about 35 miles away, which would house used fuel until a permanent solution could be identified. Some 83,000 metric tons of used fuel are currently housed in temporary facilities across nearly 40 states.

A staff report from the NRC in March 2020 recommended licensing the proposed facility. Holtec's initial plans call for radioactive waste to be buried in 500 stainless steel canisters at a 1,000-acre site for 40 years. Holtec says that could increase to 10,000 canisters. Holtec, which has pursued the project since 2017, did not have an immediate comment on the suit, company spokesman Joe Delmar said. However, he noted that Holtec and its partner in New Mexico, the Eddy-Lea Energy Alliance, "continue to seek opportunities to have discussions with the governor and other state officials" in New Mexico.

Delmar described Holtec's planned complex as "vital for national security." He also asserted the plan was welcomed by officials in the affected counties in southeastern New Mexico "for the jobs and positive economic impact it will have on the local community."

NRC spokesman David McIntyre said the agency does not comment on pending litigation. In March 2020, NRC issued and environmental impact statement (EIS) which found the project would have “minimal” impact on the environment if built and operate through multiple phases. The complaint argued the EIS ignored the cumulative impact of the site and that the opposition of State leaders was unduly ignored during the NRC’s licensing process.