ML20039C657
| ML20039C657 | |
| Person / Time | |
|---|---|
| Issue date: | 12/02/1981 |
| From: | Palladino N NRC COMMISSION (OCM) |
| To: | OFFICE OF MANAGEMENT & BUDGET |
| Shared Package | |
| ML20039C658 | List: |
| References | |
| NUDOCS 8112300010 | |
| Download: ML20039C657 (1) | |
Text
,/
'e UNITED STATES g
NUCLEAR REGULATORY COMMISSION 3
o g
iE WASHINGTON, D. C. 20555
%,*****/
December 2,1981 CHAIRMAN Mr. Donald K. Peterson Assistant Director for Legislative Reference Office of Management and Budget Washington, D.C.
20503
Dear Mr. Peterson:
This is in response to your request for the Nuclear Regulatory 1
Commission's comments on S.1606, the "Nucl, ear Power Plant Property i
Damage Insurance Act of 1981."
The Comission's views on this bill are contained in my recent testimony l
before the Senate Subco.mmittee on Nuclear Regulation and the Senate Committee on Energy and Natural Resources. A copy of that testimony is enclosed. The additional comments-of Commissioners Gilinsky and Ahearne are also attached.
Sincer ly,
/7.
Y '.h w,S l2 g.gg.tt v-
)
h dunzio J. Palladino
/
/
Enclosures as stated
~
4 4
l a
se
1 TESTIMONY ON NUCLEAR ACCIDENT CLEANUP INSURANCE U. S. SENATE COMMITTEE ON ENERGY AND NATURAL RESOURCES SUBCOMMITTEE ON NUCLEAR REGULATION OF THE COMMITTEE ON ENVIRONMENT AND PUBLIC WORYS Mr. Chairman, I am pleased to be invited to testify today on the ir..portant legislation (S.1606) introduced by Senator Heinz.
I should begin by saying that the Commission's expertise does not lie in the area of utility financing and ratemaking and that the Commission will therefore not' comment on the details of the financial measures proposed.
Our principal concern is the protection of the public's bealth and safety.
We support taking prompt steps to overcome the financial problems which are hindering the clean-up of TMI-2 in order to ensure that the public health and safety is not threatened.
As we have all become aware, one of the major byproducts of the March 28, 1979 accident at Three Mile Island has been the inability of the TMI licensees to provide the finances to meet the large costs estimated to be necessary to safely decontaminate the TMI-2 reactor.
The NRC is very concerned that a prompt resolution to this problem is required to eliminate a potential threat to the health and safety of the public and the environ-ment.
The General Public Utilities Corporatic'n and its operating subsidiaries -- Metropolitan Edison Company, Pennsylvania Electric Company, and Jersey Central Power and Light Company -- have the legal obligation to clean up the reactor site.
It has become increasingly obvious that GPU does not have adequate financial resources to proceed expeditously e
+}.;.'r t +. z. -,~
n unless a larger source of funds is forthcoming, either through rate increases frc;n its customers or through assistance from outside sources, or a combination of both.
Clearly, the cleanup of TMI is an issue of national concern and Congress is the appropriate forum to consider the conditions under which funds will be provided for the cleanup of TMI-2.
Although the Commission takes no position on the specific methods of obtaining funds for TMI-2 cleanup proposed in S.1606 and other legislation, we wlcome the approach encom-passed in the proposed legislation as a reasonable mechanism for solving this continuing problem.
However, we would like to stress that remaining insurance funds are running out and that the proposed fund specified in Section 6 of the bill may not be established in sufficient time to provide adequately for near-term cleanup costs.
You may thus wish to consider interim steps to bridge any gap in time before a mechanism such a.s that provided in tha bill is in place.
With respect to the broader issue addressed in the proposed legislation, in the interests of promoting protection of public health and safety and minimizing damages to life or property, the Commission supports the requirement for on-site property damage insurance to provide a substantial
~
source of funds that can be available in a short time to clean up any future reactor accidents. As you may be aware, the Commission on August 18, 1981 published in the Federal Reaister a proposed rule that would require power reactor licensees to purchase the maximum amount of on-site property damage insurance available from private sources.
Insurance currently available now totals $450 million, although the nuclear A'-
-y_
m 5 h.
{
r 3
insurance pools -- American Nuclear Insurers and Mutual Atomic Energy Reinsurance Pool and the electric utilities' own mutual insurance organization, Nuclear Mutual Limited -- are attempting to increase aggregate policy limits to narrow the gap between available insurance coverage and potential cleanup expense. There is general optimism that about $1 billion can be made available by early next year for property insurance and cleanup through private insurance and utility payment of retrospective premiums.
If this amount cannot be established -- perhaps because of a reluctance of utilities to pledge,the necessary retrospective premiums -- the Commission would support a program of mandatory payment of premiums.
If necessary,. the Commission would seek legislative changes to mandate the availability and purchase of such insurance.
It is not certain that private sources of insurance will be available to cover cleanup costs much lanjer than those arising from the Three Mile Island accident.
Consequently, we see the legislation as a means of comple-menting NRC's proposed rulemaking to afford protection of public health and safety and minimize danger to life or property.
Further, Federal legislation may help to speed up the establishment of such a fund.
We have several specific comments on S. 1606.
First, the requirement in Section 4(b) for shutdown of all operating reactors 180 days af ter enact-
~
aent of the bill unless the licensees have paid the first insurance premium is almost certain to cause some shutdowns, in view of the time that would be needed after enactment to get the insurance scheme in place.
Until the system is established, licensees and applicants will be unable to meet the requirements of the proposed legislation. A similar problem p
-_-m,
.m
_"1
_y
s
.z.
would exist with respect to the requirement that the premium be paid before a new operating license can be issued. We would propose that the requirement for premium payments be keyed to some period following the date of formal publication by the Secretary of Energy of the premium rates, as required by Section 5(a), rather than to the date of enactment of the bill.
4 Second, Section 7 should be expanded to authorize the Secretary of Energy to remove the core and to receive, process, and store those radioactive wastes, including the damaged fuel, from the TMI-2 cleanup that the NRC specifies as unsuitable for. disposal in a commercial low level waste facil i ty.
Much can be learned about the safe handling and storage of material fran nuclear reactors from an examination of the damaged core and also from processing and solidification.of the wastes.
These are legitimate research and development tasks for the Department of Energy.,
Moreover, if DOE and its cont ictors were to take responsibility for the core of the damaged reactor, one of the largest elements of technological unc;rtainty would be removed. Thus, the other parties involved in funding the cleanup need not concentrate on this element.
We support the proposed legislation as a significant step in protecting public health and safety with respect to both ' cleaning up TMI-2 and the broader issue of future accident cleanup for all licensed reactors.
t.~
~ :.
~,
a 5-We note the following as complementary steps to the legislation by involving those parties having a logical interest in and benefit fran TMI-2 cleanup-
)
J 1.
The Electric Power Research Institute (EPRI) research and
)
1 development support at TMI-2 can act as a channel for funds from utility and reactor manufacturers' who would gain valuable insicht into the effects of reactor accidents and the behavior of reactor equipment.
2.
The recent recommendation of the. Edison Electric Institute (EEI) in conjunction with Governor Thornburg's proposal that the electric utility industry provide about $190 million toward cleanup c~ould provide an important increment in cleanup funding that should be encouraged.
While maintaining the basic independence of nuclear regulation mandated by Congress, the Commission intends to support both federal and state initiatives to expedite the cleanup of TMI-2. We view the conditions persisting at that site since the accident as very serious.
Most disturbing is the uncertainty about the availability of resources combined with the increasing potential for hazard to the public "as time passes with little progress being made.
Irrespective of the ultimate fom that TMI-2 cleanup funding takes, the NRC is prepared to support expeditious actions consistent with ensuring y-
- .eu
>..ao,.*
,_=s i
s a N-m.-'
n
+
.A
',