ML20205E653

Forwards Replies to Questions Re Federal Indemnification of Public Liability Claims & Price-Anderson Act Legislation, Per 860707 Request

ML20205E653
Person / Time
Issue date:	08/04/1986
From:	Zech L NRC COMMISSION (OCM)
To:	Simpson A SENATE, ENVIRONMENT & PUBLIC WORKS
References
NUDOCS 8608180456
Download: ML20205E653 (27)

Text

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'Augusti4,'1986 CHAIRMAN The Honorable Alan Simpson, Chairman Subcommittee on Nuclear Regulation Committee on Environment and Public Works United States Senate Washington, D.C.

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Dear Mr. Chairman:

The following information is provided in response to your ten questions of July 7, 1986, concerning federal indemnification of public liability claims and Price-Anderson Act legislation.

I trust it is responsive to your needs.

If my office can be of further help, please do not hesitate to' contact us.

Sincerely, Lando W. Zech, Jr.

Enclosures:

As stated cc: Sen. Gary Hart i

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i 8608190456 860804 PDR COMMS NRCC CORRESPONDENCE PDR

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' QUESTION 1.

Pleaselistail.NRbinhemnityagreement'sp'ursuanttowhich'

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the federal government has an obligation to indemnify the licensee for public liability claims and the amount of the potential federal liability in each such case.

In addition, please identify the amount of financial. protection that is required and'the amount of financial protection that is actually carried by each such licensee.

ANSWER.

See attached charts.

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Indannity J.g_is With Power Reactors Above 100N(e)

('Ihese licensees are required to and maintain financial protection of $665 million; puis:iiial Federal indemnity is

$500 million per nuclear incident)

Licensee Alabama Power Ocupany Arizona Public Service Ccapany Arkansas Power and Light Ccmpany Baltimore Gas and Electric Capany Boston Ediscn Ccapany Carolina Power and Light Cmpany (2)

Cleveland Electric Illuminating Capany Cwud.cclth Edison Ccmpany (5)

Connecticut Yankee Atcmic Power Capany Consolidated Ediscn.Ccmpany Constzners Power Otmpany Detrcit Edison Ccmpany Duke "cwr Ocmpany (3)

Duquesne Light Ccmpany Fir.ru a ecuer Corporation Floricia Power and Light Ccmpany (2)

Georgia Power Cc%y Culf State-Utilities Ccmpany Indim and Michigan Power Capany icwa Electric Light and Power Capany Esnsas Gas and Electric Ocupany Ieng Island Lighting Ccmpany Iouisiana Power and Light Capany l

Maine Yankee Atatic Power Capany l

Metropolitan Edison Ccapany Mississippi Power and Light Capany Nebraska Public Power District Niagara Mohawk Power Caporation Northeast Nuclear Energy Ccmpany Northern States Power Capany (2)

Omaha Public Power District Pacific Gas and Electric Capany l

Pennsylvania Power and Light Capany Philadelphia Electric Ccmpany (2)

Portland General Electric Coupany Ocwer Authority of the State of New York Public Service Capany of Colorado Public Service Electric and Gas Cm pany Pochester Gas and Electric Capany Ete: The ntater in parenthesis represents the indemnity agreements in effect for each licensee-operator of the facility.

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3 Sacramento Municipal' Utility District 1

South Carolina Electric and Gas Ocupany Southern california Edison Ccupany Tennessee Valley Authority (2) 1 Toledo Ediscn Ccmpfny Union Electric Ocupany Vermont Yankee Melear Power Cuspasstion Virginia Electric and Power Ccmpany (2)

Washingtcm Public Power Supply System Wisconsin Electric Power Otmpany Wisconsin Public Service Corporation Yankee Atcmic Electric Ocmpany Indennity Ag==i.iaits with Licensees Possessing Storage of thclear

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Material (StM) Limnse Prior to Issuance of Operating License.

.('1hese limnsees.-are required to and maintain financial svimidon of $1 million; pc^uait.ial Federal indennity is $500 million per nuclear incident)

Licencee Carolina Power and Light Ccmpany Cuim.m -Ath Edison Ccmpany Illinois Power Ccmpany Public Service Ccmpany of New Hanpshire Tennessee Valley Authority (2)

Texas Utilities Generating Ccmpany i

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4 Indsmity Ap.___ ts with Power Reactors Iess 'Ihan 100 at(e)

(Potential Federal indennity is $500 million per nuclear incident)

Licensee Required Financial Fwi.ecition Con =wrs Power Ctmpany

$44,400,000 (Big Rock Point)

Dairyland Electric Cooperative

$30,600,000 (Ia Crosse)

Detroit Edison Conpany

$665,000,000*

(Fermi Unit 1)

Pacific Gas and Electric Ocmpany

$53,300,000 (Hunboldt Bay)

Philadelphia Electric Capany

$665,000,000*

(Peach Bottan Unit 1) f i

• Ferna Unit 1 and Peach Bottan Unit 1 are single units of nulti-unit large power reactor stations; the current maxinum financial protectial of $665 million, which is that required of large power reactors, covers all of the reactors at the site.

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Indsunity Ag_.

ts With Ncm-Profit Educational Institutions (Potential Federal iMty is $5d0 million per nuclear incident above $250,000)

Licensee

.i Arizcma, University of Brighaun Young University California, University of (4)

Catholic University of America Colunbia University Cornell University Florida, University of Georgia Institute of Technology Idaho State University Illinois, University of IcWa State University Kansas State University Kansas, University of Iowell Technologic Institute Manhattan College Maryland, University of Massachusetts Institute of Technology Menphis State University Michiigan State University Michigan, University of Mbewi, University of (2)

New Mexico, University of,

New York State University North Carolina State University Ohio State University Oklahczna University Oregon State University Pennsylvania State University Purdue University Reed Institute Renna==almer Polytechnic Institute 4

Rhode Island and Providence Plantations Texas A & M University of Texas, thiversity of Utah, thiversity of Virginia Polytechnic Institute Virginia, University of Washington State University Washington, thiversity of Wisconsin, University of Worcester Polytechnic Institute e

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.,6 Indsmity Awwts With Federal Agency Beactors (Potential Federal indennity is $500 millim per nuclear incident; no firmv ial protecticn required)

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Licensee Anned Forces Radiobiology Paaaarch Institute U.S. Anny Ma&ariala Research Agency U.S. Geological Survey National Aerceautics and Space Administration National Bureau of Standards Maritime Administration Veterans Administration Hospital Indesmity Niwan=aits With Non-Power Peactors (Potential Federal indennity is $500'million per Inv lear incidenti)

Licensee Required Financial Fdu3ction Aerotest Operations, Inc.

$1,500,000 l

Battelle Menorial Institute

$1,000,000 Battelle Mernorial Institute

$1,000,000 Dow CWir a_1 Otmpany

$1,500,000 G. A. Technologies, Inc.

$2,500,000 General Electric Coupany

$18,500,000 tiorthrcp Corporation

$1,500,000 Rockwell International Corporation

$1,000,000 Saxton Nuclear Experimental Corporaticn

$6,300,000 Union Carbide Corporation

$2,500,000 Westinghouse Electric Corporation

$1,000,000 Westinghouse Electric Cuspzaticm

$1,000,000 i

Indemnity Ata===aits With Plutoniun Processing and Fuel Fabrication Facilities l

(Potential Federal indermity is $500 millicn per nuclear incident)

Lim Required Financial Protecticn Babcock & Wilcox Ccmpany

$160,000,000 Babcock & Wilcox Ccmpany

$160,000,000 Gane al Electric Ccepany

$160,000,000 Docon Nuclear Corporation

$160,000,000 Westinghouse Electric Corporation

$160,000,000

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QUESTION 2.

Aside from the differences'in the amount of indemnit'y required and the agency responsible for implementing the indemnity J

agreement, what differences, if any, are there in the indemnity obligations of the federal government under an indemnity agreement with a DOE contractor and an indemnity agreement with an NRC licensee?

ANSWER.

The legal obligations of the federal government are the same under both types of indemnity agreements. The major difference under the existing Price-Anderson system is that while contractor indemnification is 'the " primary'" layer of insurance (because DOE contractors are not required to carry private insurance) and would be used to pay the first dollar of public liability, indemnity for large nuclear power reactors is now 'only a contingency fund since the primary and secondary layers of. insurance required by Section 170b. have surpassed $560 million.

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dUESTION3.

(a) What 'is the intent, scope, and effect.-of section 170j. of the Atomic Energy Act with respect to the indemnity obligations of the federal government under an NRC indemnity agreement?

ANSWER.

This section allows.the NRC to pledge the availability of funds from the United States Treasury in advance of any appropriation of those funds by the Congress.

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IQUESTION3.ICn.t'inued)

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(b)

In authorizingIthe NRC to "make contracts in advance of appropriations and incur obligations without regard to section 3679 of the Revised Statutes, as amended," what authority does this provision confer on the NRC that would not be available in the absence of this. provision?

ANSWER.

Section 3679 is now codifie' as 31 U.S.C. 665, Antideficiency Act, and forbids d

government officers and employees from creating obligations for expenditures or

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j entering into contracts for the payment of money in advance of appropriations "unles's such contract or obligation is authorized'by law." In the a'b'sence of.

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Section 170j., NRC indemnity agreements would not be " authorized by law" and thus would contravene 31 U.S.C. 665.

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QUESTION 4.

Nhat is.the nature of the " obligation" that the federal government incurs when NRC enters into an indemnity-agreement?

Is the federal indemnity contemplated under these agreements a contractual entitlement?

ANSWER.

s The obliga' tion incurred by the federal government is set out in Article III of the indemnity agreement. See, e.g., 10 CFR 140.92. Section 1 of that article states:

The Commission undertakes and agrees to indemnify and hold harmless the licensee and other persons indemnified, as their interest may appear from public liability.

The remaining sections of Article III specify the conditions and limitations on l

this obligation. The indemnity agreement obligates the federal government to 1

supply funds to pay valid claims for "public liability", on behalf of " persons indemnified", in the event of a " nuclear incident". These three terms are defined in Section 11 of the Atomic Energy Act, subsections w, t, and q respectively.

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QUNSTION 4. '(Continued)

T'he indemnity agreement is a contract between the licensee and the federal government commencing and terminating as set out-in Article VII of the agreement. This article also states that termination of the agreement does not affect the obligations of either the licensee or the. federal government for nuclear incidents which occur during the term of the agreement.

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QUES' TION 5.

(a) ~ Under what.' circumstances and for what type aria. amount of-

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"public liability claims" is-the federal government

-obligated to pay claims under such indemnity agreements?

f ANSWER.

See response to Question 4.

The indemnity obligation is triggered by a

" nuclear incident." The amount of public liability would be determined by the courts under applicable State law.

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QUESTI0N5.;.(Continued)

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(b) 'Within the aggregate lim'it on liability, does the. federal' -

go'vernment have any discretion to detemine the amount of indemnity that it will provide, following a court award, or is it bound by the court's judgment?

ANSWER.

s In our view the federal government has no such discretion. The determination of the amount of public liability is made by the courts under State law. In cases determined to be an " extraordinary nuclear occurrence," or where it is possible that public liability will exceed the limitation on liability, a

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2 federal' district court will' preside.

In other cases State courts could adjudicate some claims. When claims determinations are judicially complete (including any appeals), the federal government is obligated under the indemnity agreement to pay them on behalf of persons' indemnified.

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0 E' TION 5. (Continued) ~

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S (c). Does~ the federal government _have any discretion to determine the type of damages it will pay and will not pay,.

following a court award, or is it bound by the court's judgment?

ANSWER.

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In our view the federal government has no such discretion.- The indemnity agreement states that the federal government will hold the indemnified party

" harmless" from public liability. The determination of the latter is made by the courts under State law. However, the feceral government presumably could appeal in the courts.a determination of "public liability" wh'ich'it believed to be contrary to the language or intent of the Price-Anderson Act.

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OdESTI'ON' 5.f(Cintinued)~

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(d) Does the. federal government'have.any discreti6n to determine the timing for the payment of such claims

( i.e., could the federal government spread the payment of claims out over a period of years, to minimize the I

budgetary impact), following a court award, or is it bound by the court's judgment?

ANSWER.

The federal novernment would be bound by the court's judgment. However, the government could petition the court for such an arrangement.

In any practical situation, it'is likely that determination of public liability would be spread-out over a number of years as various classes of claims are heard and adjudicated. Following the Three Mile Island accident, three years were needed to settle certain class action claims and five years for the court to reach judgment on other economic claims, while other personal injury claims are still pending.

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QUESTION 6.

.(a). WL.e federal indemnity is requ. ired, how are valid public liability claims paid? From what source of funds?

ANSWER.

With re'spect to large power reactors', private insurance, currently s~et at $160

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million, is used first. The secondary layer, consisting of pro-rata contributions from utilities operating nuclear power plants, is used next.

Since federal indemnity has been phased out with respect to these NRC licensees, indemnity funds would be used only to cover defaults in excess of

$30 million in the secondary layer, with a right of subrogation against the defaulting utilities.

With respect to other NRC licensees who do not carry the primary and secondary

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layers of insurance, indemnity funds would be used from the first dollar of public liability. The source of such funds would be appropriations from Congress.

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'QdESTION6.(Continu'ed)

-2' (b) What role does Congress play in paying such claims?

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ANSWER.

The Congress would have to approp'iate funds from the United States. Treasury to r

pay public liability claims adjudicated by the Courts.

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QdESTION 6. (C:ntinu'ed),

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Is'the NRC required to use whatever appropriated funds are '

(c) available, even though such funds are appropri'ated for some other program, project, or activity, for the payment of such claims?

ANSWER.

Funds appropriated by the Congress for specific purposes could nut be used.to pay public liability claims. Unrestricted funds could be used for the purpose, but such use would adversely affect the ability of the NRC to continue its mission. The NRC would request special appropriations to cover indemni,fied public liability claims accepted ~by the courts.

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QUESTION 6. (Continue'dy'

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-(d) Does s'ection 170j. require resort to such appropriated j

funds, or is this a matter of discretion for NRC to determine?

ANSWER.

Section 170j. does not require use of NRC appropriated funds. However, public '

liability claims covered by an indemnity agreement must ultimately be paid by the federal government. As stated in the response to question 6(c), the NRC would seek special appropriations for any indemnity payments which would otherwise substantially affect the NRC budget.

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-QUESTION'6i'(C:ntinued),

(e) In the absence of a decision to employ available appropriated funds, either as a matter of discretion or because the statute required such funds to be used, what additional sources of money are available to discharge the federal government's obligation'to indemnify such claims?

ANSWER.

For accidents involving only NRC licensees (i.e., neither the DOE nor a DOE contractor is involved), the only source of funds would be a supplemental

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appropriation authorized by the Congress from the U.S. Treasury.

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QUESTION 7.

Under what circumstances, if any, is the judgment appropriation (31 U.S.C. 1304) available to pay public liability claims for which the federal lovernnent has incurred an obligation under the Price-Anderso.. Act to indemnify such claims? Has the judgment appropriation ever.been used to pay such claims?

ANSWER.

The cited statute applies only to judgments against the United States.

Price-Anderson Act claims adjudicated in the courts would be against " persons indemnified," which does not include either NRC or D0E Therefore, this statute could not be used as authority-for the disbursement of' indemn'ity funds.

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Should the government fail to disburse the funds, suit could be brought against the United States in the Court of Claims. Judgments rendered by~that court against the United States would be ' paid out of'the' judgment appropriation.

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To our knowledge this statute has never been used in the Price-Anderson context.

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e QUESTION 8.

Under what circumstances, if any, is NRC authorized to meet obligations incurred pursuant to contracts of indemnification through the borrowing of funds? Is this borrowing subject to Congressional approval, either through the appropriations process or otherwise? Please identify all such authorities available to NRC.

ANSWER.

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NRC has no borrowing authority. Any payment of claims under the Price-Anderson Act would come from appropriated funds.

QUESTION 9.

(a) What happens if the federal government does not fulfill its obligation to indemnify public liability claims, through any of the options discussed above? What recourse does the accident victim have against the federal government?

ANSWER.

Should the government fail to pay indemnity claims adjudicated by the courts, it is in default. We are unaware of any cases where the federal government has refused to pay a court judgment after all appeals have been exhausted. The claimant could seek recourse directly from Congress, or could pursue a constitutional c'ase before the Supreme Court of the United States.

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QUESTION 9.(Continued).

(b) What recourse does the accident victim have against any of the indemnified parties?

ANSWER.

There would be no separate right of action by a claimant against a person indemnified.

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QUESTION 9.(C;ntinued).

(c) What other recourse, if any, does the accident victim have?

ANSWER.

None. See answer to 9(a).

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QUESTION 10.

Under what circumstances, if any, may a person who may otherwise be legally liable for public liability claims following a nuclear incident, but who is indemnified by the omnibus coverage of an indemnity agreement, be held liable for the payment of such public liability claims under the existing Price-Anderson Act?

ANSWER.

None.

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-c Docket Nos.:

STN 50-456 and STN 50-457 Mr. Dennis L. Farrar Director of Nuclear I.icensing Commonwealth Edison Company Post Office Box 767 Chicago, Illinois 60690

SUBJECT:

REVISIONS TO THE BRAIDWOOD SECURITY PLANS Enclosed is a listing which incorporates the latest revisions to the approved physical security plans. This listing is a chronology of the approved plans' evolution and should be maintained with the safeguards plans.

All open safeguards licensing items have been closed.

Janice A. Stevens, Project Manager PWR Project Directorate #5 Division of PWR licensing-A

Enclosure:

As stated cc:

R. F. Skelton, NMSS J. l.. Gibson, SSPD Distribution:

sDocket TJ1esy E. Jordan NRC PDP B. Grimes local PDR J. Partlow PDf5 Reading File M. Rushbrook T. Novak ACRS (10)

OELD J. Stevens 0

0FC :PDf5

/ :

(.__:..___.......:..______....:______......:.___________:..._________:_________..

NAME :JAStev'ns:es DATE :8/ h/86 0FFICIAI. RECORD COPY 0608180454 860806 DR ADOCK 05000456 PDR

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UNITED $TATES 1

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NUCLEAR REGULATORY COMMISSION L

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Docket Nos.:

STN 50-456 and STN 50-457 Mr. Dennis I.. Farrar Director of Nuclear I.icensing Commonwealth Edison Company Post Office Box 767 Chicago, Illinois 60690

SUBJECT:

REVISIONS TO THE BRAIDWOOD SECURITY Pl.ANS Enclosed is a listing which incorporates the latest revisions to the' approved physical security plans. This listing is a chronology of the approved plans' evolution and should be maintained with the safeguards plans.

All open safeguards licensing items have been closed, a d.)he~

Ja ce A. Stevens, Project Manager i

PWR Project Directorate #5 Division of PWR f.icensing-A

Enclosure:

As stated cc:

R. F. Skelton, NMSS J. t.. Gibson, SSPD g

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T 50-456/457 BRAIDWOOD STATION, UNITS 1 AND 2 The approved security plans for Braidwood Station consist of the amendments, revisions, and changes listed below. The Security Personnel Training and Qualification Plan and the Safeguards Contingency Plan are Appendices of the Security Plan. As requested in Commonwealth Edison's letter dated April 22, 1983, Revision 6 is to be considered "the initial formal submittal."

"BRAIDWOOD STATION SECURITY PLANS "

Revision 6, dated April, 1983 (by letter dated April 22, 1983) as revised by:

- Revision 7, dated August, 1983 (by letters dated September 19 and 6

October 28, 1983) s

- Revision 8, dated October, 1983 (by letter dated November 17, 1983)

- Revision 9, dated August, 1984 (by letters dated September 24 &

25, 1984)

- Revision 10, dated February,1985 (by letter dated February 25, 1985)

- Revision 11, dated May,1986 (by letter dated May 27, 1986)

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L, Mr. Dennis I.

Farrar braidwoodStation Comonwealth Edison Company 4

Units 1 and 2 cc:

Mr. William Kortier Ms. l.orraine Creek Atomic Power Distribution Route 1, Box 182 Westinghouse Electric Corporation Manteno, Illinois 60950 Pust Office Box 355 Pittsburgh, Pennsylvania 15230 Douglass Cassel, Esq.

109 N. Dearborn Street Joseph Gallo, Esq.

Chicago, Illinois 60602 Isham, Lincoln & Beale 1150 Connecticut Ave., N. W.

Elena 7. Kezelis, Esq.

Suite 1100 Isham,l.incoln & Beale

- Washington, D. C. 20036 Three First National Plaza Suite 5200 C. Allen Bock, Esq.

Chicago, Illinois 50602 Post Offices Box 342 Urbana, Illinois 61801 Mr. Charles D. Jones, Director Illinois Emergency Services Thomas J. Gordon, Esq.

and Disaster Agency Waaler, Evans & Gordon 110 East Adams Street 2503 S. Neil Springfield, Illinois 62706 Champaign, Illinois 61820 George L. Edgar Ms. Bridget little Rorem Newman & Poltzinger, P.C.

Appleseed Coordinator 1615 1. Street, N.W.

117 North I.inden Street Washington, D.C.

20036 Essex Illinois 60935 Michael Miller, Esq.

Mr. Edward R. Crass Isham,l.incoln & Beale Nuclear Safeguards and One First National Plaza 1.icensing Division 42nd Floor Sargent & Lundy Engineers Chicago, Illinois 60603 55 East Monroe Street Chicago, Illinois 60603 U. S. Nuclear Regulatory Commission Resident Inspectors Office RR#1, Box 79 Braceville, Illinois 60407 Regional Administrator, Region III l

U. S. Nuclear Regulatory Commission l

799 Roosevelt Road l

Glen Ellyn, Illinois 60137 l

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