Since the construction of the first commercial nuclear power plant in 1957, the nuclear power industry has operated under the philosophy of economy of scale - the idea that increased power plant size accounts for higher economic efficiency. However, there has been a recent shift in direction; small modular reactors (SMRs) and micro-reactors are being considered as potentially wise investments for commercial power producers in that they can provide advantages that large-scale reactors may not possess in terms of reactor safety and investment risk. However, this may come at the risk of a higher levelized cost of electricity (LCOE). LCOE may be reduced by enriching the fuel passed its regulated limit of 5 wt% (w/o) 235U. The high assay low-enriched uranium (HALEU) fuel (5–20 w/o 235U) is introduced to increase the plant capacity factor, which thereby decrease fuel supply costs and reduce the LCOE. While decreasing plant LCOE seems like a clear advantage, several issues may result from increasing enrichments to the HALEU level in an SMR or micro-reactor design. This paper aims to shed light on these issues and address how they may affect the overall reactor design by using HALEU fuels in these reactors.This paper first discusses the notable effects on a reactor design with higher enrichment, then analyzes a SMR case study based on the NuScale’s 160 MWth SMR design. The case study reveals that the SMR with higher enriched fuel was able to double both fuel burnup and cycle time with an average core enrichment of 8.34 w/o and a maximum average assembly enrichment of 9.10 w/o. Moreover, this higher enriched core was found to operate with a maximum global peaking factor of 1.86, well below the published limit of 2.0. Likewise, the maximum axial flux offset of −2.4% and the maximum boron concentration of 1757 ppm both remain within their respective safety constraints. Notable fission poisons, such as 149Sm and 135Xe, were also found to sharply increase in the HALEU core. Additionally, the average fuel temperature and peak cladding temperature fell within their respective safety constraints. Core-averaged flux, fluence, cladding creep, and post-shutdown decay heat were also investigated. Lastly, the higher enriched core was found to reduce LCOE by approximately 1.23 $/MWh.