WASHINGTON, March 22 (Reuters) - U.S. regulators this

week told a nuclear power company founded by Bill Gates that its

planned construction permit application for a high-tech reactor

needs more work, an issue that a critic of the technology said

could delay development of the plant in Wyoming.

TerraPower LLC, is trying to build the $4 billion Natrium

reactor in Wyoming on the site of an old coal plant. The permit

application is expected this month.

So-called advanced nuclear reactors like Natrium that use

new materials and fuel types are supported by the administration

of President Joe Biden as a potential way to fight climate

change. The U.S. Department of Energy has authorized up to $2

billion of taxpayer money for the Natrium project.

The U.S. Nuclear Regulatory Commission on March 19 sent

TerraPower a 40-page overview of a "pre-application readiness

assessment" of safety and environmental issues for the reactor.

TerraPower had asked NRC for the assessment ahead of its

construction permit application.

The NRC told TerraPower that the company made several

references to technical and licensing reports that its staff has

not yet reviewed or that are currently under review.

"References to reports for which the reviews have not yet

been completed represents a potential (construction permit)

application review schedule risk," the NRC said in the letter.

"The NRC review shows that the Natrium construction permit

application is simply not ready for prime time," said Edwin

Lyman, a physicist and nuclear power safety advocate at the

Union of Concerned Scientists nonprofit group.

"TerraPower should take the time to produce a complete,

high-quality application. Otherwise, the Wyoming project is

likely to encounter costly delays," Lyman said.

A TerraPower spokesperson said the readiness assessment was

a tool to evaluate the completeness of its forthcoming

construction permit application and that its timeline is on

track.

"TerraPower will be the first company to submit a commercial

advanced nuclear power reactor to the NRC and we feel confident

in our timeline to submit this application to the NRC this

month," they said.

The spokesperson added that "the NRC states in the letter

their confidence that TerraPower can supply additional

information where needed in the official construction permit

application."

The review questions how TerraPower will demonstrate that

the materials used to construct the plant will survive harsh

conditions over its operating life, Lyman said.

The reactor will be cooled with liquid sodium, instead of

water used by today's reactors.

TerraPower in late 2022 delayed Natrium's launch date by at

least two years to 2030 due to a lack of special fuel called

high assay low enriched uranium, or HALEU. Russia has been the

only supplier of HALEU, but TerraPower and Centrus Energy Corp ( LEU )

are trying to establish commercial production

capabilities for the 2030 start.