ML19259C116

Requests Confirmation of Understanding of Effect of Indemnity Coverage Under Agreement E-5 of Price-Anderson Act Re Decommissioning Activities of Kaiser Engineering,Inc

ML19259C116
Person / Time
Site:	University of Iowa
Issue date:	06/07/1979
From:	Stratford R HOGAN & HARTSON
To:	Saltzman J Office of Nuclear Reactor Regulation
References
NUDOCS 7906120366
Download: ML19259C116 (3)

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Mr. Harold R. Denton Director Office of Nuclear Reactor Regulation U.S. Nuclear Regulatory Commission Washington, D. C. 20555 Attention: Mr. Jerome Saltzman, Chief Antitrust and Indemnity Group

Dear Mr. Denton:

We have been asked to inquire on behalf of Kaiser Engineering, Inc. (Kaiser) regarding the application of indemnity coverage under the Price-Anderson Act to reactor decommissioning activities. At this time, Kaiser is in the process of bidding on a proposed contract to be let by the Iowa State University at Ames, Iowa. The contract calls for the decommissioning of the Argonaut Research Reactor at the University and the decontamination of the building housing the reactor. In conversations with employees of the University, a question arose concerning the applicability of the Price-Anderson Act to the decommissionir.g process.

Price-Anderson coverage at Iowa State University is provided pursuant to Indemnity Agreement No. E-5 dated July 16, 1962, as amended, between the University and the United States Atomic Energy Commission. NRC Docket No. 50-116. The agree-ment is the standard form utilized by the NRC for nonprofit educational institutions. See C.F.R. S 140.95. Our under-standing of the effect of the agreement and applicable NRC policy is as follows:

1. In the case of a nuclear incident, Article III(l) of the Agreement provides for indemnification O

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HOGAN a HARTS ON Mr. Harold R. Denton Page Two 13 from public liability not only of Iowa State University but also of all other parties who C may be held liable. Specifically, we under-stand that an engineering firm involved in the decommissioning and decontamination of the Iowa State University research reactor would be covered by the Agreement.

2. The agreement is effective until the expiration of License R-59 or until all the radioactive material has been removed from the location and transportation of the radioactive material from the location has ended, whichever is later.

Indemnity Agreement No. E-5, Articlc VII.

3. The term " radioactive material" includes the reactor vessel and associated equipment so long as those materials are themselves radio-active and thus fall within the definition of

" byproduct material." See Indemnity Agreement No. E-5, Article I(8) ; Atomic Energy Act of 1954, as amended, S ll(e) (Byproduct material means "any radioactive material . . . yielded in or made radioactive by exposure to the radiation incident to the process of producing or utilizing special nuclear material"). Thus the Indemnity Agreement will remain in effect until the decommissioning and decontamination process is completed.

4. Indemnification by the Commission under the Agreement is subject to a $250,000 " deductible."

Proof of financial protection (i.e., insurance in this amount) is not required of non-profit educational institutions such as Iowa State University. 10 C.F.R. S 140.71. Our understanding is that nuclear contractors and suppliers who deal with such institutions are either self-insured -

for the amount of the. deductible or carry a .

standard " Suppliers and Transporters" insurance policy in that amount.

These understandings were orally confirmed in con-versations last week with Messrs. Jerome Saltzman, Ira Dinitz 2284 J42

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HOGAN a HARTSON Mr. Harold R. Denton Page Three ]

and Robert Reid of your staff. All of these gentlemen were most helpful in responding to our inquiries. However, in,  ;

view of the importance of this matter, Kaiser would appreciate your written confirmation of the above conclusions. An early reply would be greatly appreciated.

Sincerely, m

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Richard J. K. Stratford RJKS:mf 2284 ;43 5

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