ML19341C030
| ML19341C030 | |
| Person / Time | |
|---|---|
| Site: | Crane  |
| Issue date: | 01/06/1981 |
| From: | Moffett T HOUSE OF REP., GOVERNMENT OPERATIONS |
| To: | Ahearne J NRC COMMISSION (OCM) |
| Shared Package | |
| ML19341C027 | List: |
| References | |
| NUDOCS 8102280460 | |
| Download: ML19341C030 (3) | |
Text
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January 6, 1981 Honorable John F. Ahearne Chairman Nuclear Regulatory Commission 1717 H Street, N.W.
Washington, D.C.
20555
Dear Chairman Ahearne:
As you know, the Subcommittee on Environment, Energy and Natural Resources has investigated for some months the troubling question of nuclear utility mismanagement.
I appreciate your interest in the October 1980 Government Operations Committee report on " Evaluating Nuclear Utilities" which was based on the Subcommittee's inquiry into the problem of utilities with poor performance records.
The consequences of utility mismanagement of nuclear reactors are multiple.
In addition to posing threats to the health and safety of those working at and living near nuclear power plants, these errors of judgment, maintenance failures and other manage-ment mistakes can cost considerable sums of money.
It has become dramatically apparent in recent weeks that the costs of such utility miscues can soar.
The most obvious example is the burgeoning cost of the clean-up of the Three Mile Island facility owned by General Public Utilities (GPU).
That cost is now estimated to be at or over the one-billion dollar mark.
Since that figure is several times l
the original estimate for the clean-up, it is hard to have confi-dence that even that enormous sum will not inflate further.
l Of particular concern to those of us in the Subec,mmittee who have become familiar with the breadth of management problems in the nuclear industry is the major emerging question:
who should shoulder these considerable cos:s for utility mistakes?
a l D102280 W THIS STATIONERY PRINTED ON PAPER MADE WITH RECYCLED FIBERS t
t Honorable John F. Ahearne Page Two Your staff has already begun to address in some depth the question of who will pay for the TMI cican-up, since it is evident that the financial capability of GPU to sustain the full cost of clean-up is highly questionable.
As a result, an idea now being discussed by your staff, in the Congress and elsewhere is that of a " bailout" for GPU.
Such proposals contemplate loan guarantees or direct Federal grants whereby taxpayers would shoulder the cost of redressing the GPU corporate errors which led to the partial destruction of their TMI reactor.
At the same time, active discussion, and in some cases liti-gation, is moving forward over allocating the costs of other mistakes in the operation of nuclear reactors.
One example is the current New York litigation over whether ratepayers should be immediately impacted by the extended outage expected to occur at Consolidated Edison's Indian Point plant because of the water spill in that containment last October.
Those developments are of major significance to consumers and taxpayers and to the future economic viability of nuclear power.
Deciding who is to pay for nuclear utilities' mistakes, in my-view, will have more than simply economic consequences.
As you have _ publicly stated to the House Commerce Subcommittee on oversight and Investigations, regarding construction problems at the South Texas Project, little consideration has yet been given by the Nuclear Regulatory Commissior. to the health and safety consequences of the allocation of costs from nuclear construction and operational errors and their rectification I am confident that you agree with me in believing that utilities must be given every incentive -- financial and otherwise -- to operate nuclear facilities at the maximum feasible level of safety.
You told Rep. Bob Eckhardt, then Chairman of the Oversight and Investigations Subcommittee, that you would be willing to work with the Congress to assess this important question of health and safety implications of allocation of the cost of nuclear mis-takes. I would like to accept that offer of cooperation.
I believe
. that the Commission could work fruitfully with the Subcommittee on Environment, Energy and Natural Resources to evaluate this question.
Toward that end, I would propose that your staff contact the Subcomnittee. staff and arrange a meeting between you and the Sub-committee Members interested in this issue as soon as possible after the 97th Congress is fully organized.
Such a meeting would give us the opportunity to talk candidly about the implications of this'
- issue and to assess how we might work together in the near future to understand-and act upon those implications.
Honorable John F. Ahearne Page Three In addition, in order to assist the Subcommittee in assessing the NRC s taf f discussion of the idea of a GPU bailout for the TMI cleanup costs, I would appreciate your response to the following questions:
(1)
What groups have been meeting with the NRC staff or Commissioners to discuss Federal financial aid for the TMI cleanup?
For exampic, have meetings been held between NRC staff or Commissioners and individuals or groups representing shareholders, creditors or insurers of GPU? with ratepayers or other representatives of citi: ens of the GPU service area? with ratepayers or consumers from other parts of the country? with representatives of Babcock E Wilcox?
(2)
What consideration has been given by the NRC to the question of the potential liability and the timing of potential financial con t ribu t i ons to the TMI cleanup by GPU insurers, Babcock 6 Wilcox or other entities besides GPU or the Federal government?
Your cooperation in responding to these questions is greatly appreciated.
Yours very truly, TOBY MOF ETT TM:bhd
.