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The CHAIRMAN. The gentleman is recognized.
Mr. VENTO. Thank you, Mr. Chairman.

RISK ASSESSMENT

First of all, Mr. McCain, I want to especially call your attention and ask to put in the record, Mr. Chairman, an article from the Washington Post dated December 18, 1983. I was looking for this before, but in this they point out that the NRC eliminated from the final draft of its statement, which I believe every member has before them. I would have raised this question except I thought it was common knowledge, but they eliminated from the draft, Mr. McCain, the worst case accidents in nuclear plants, however improbable, that could result in death and. injury and claims and so forth.

But the point I wanted to make is that I did not intend to suggest that there is a complete coverup of everything and so forth, but I think that is an overreaction to my concerns, but indeed there is a reluctance at the very least to discuss, however improbable, the nature and the magnitude of such accidents.

The fact of the matter is by throwing the Price-Anderson sort of legislative mantle over there, that I think they make the matter worse. If they put it on a broader basis, and we will have witnesses today to talk to that, I think we might all be better served to talk to this.

So I ask the chairman to put this article in the record so that members and others who are interested in the topic might have a chance.

The CHAIRMAN. Without objection, it will be received.

[EDITOR'S NOTE.-News release dated December 18, 1983, referred to above by Hon. Bruce F. Vento may be found in the appendix.] Mr. VENTO. Mr. Chairman, I just have one question that I want to comment about.

Mr. Nelson, you heard the DOE witness say that if we did not extend the ENO, the extraordinary nuclear occurrence activity, to these depositories that it would cause a problem. Of course, they did not ask the question, I suppose you were hoping I should ask them, and that is whether extending Price-Anderson would help or hurt.

I do not want to put words in your mouth, but I guess your answer is that it is not going to help. That is a deterrent, a negative in terms of location of these repositories. What about the ENO? Doesn't the ENO actually cause a strict liability waiver of some defenses that might even catch the State in that, couldn't it? I do not know, but do you think the ENO is helpful or harmful? I guess you have said, and maybe you want to repeat again for the record, your position on the Price-Anderson.

Mr. NELSON. My position is that Price-Anderson extension would not help the State feel comfortable with the repository. It certainly would not help the State of Washington. The repository is almost equivalent to 80 nuclear reactors because it is the composite of all the waste from those reactors.

A potential accident could be extremely catastrophic. It could be a multiple of individual reactor accidents and in our opinion, it

could happen over an extended period of time. In other words, if there was a leak from the repository, that leak may not just simply go out in a pulse, but could continue over tens or hundreds of years, completely destroying a river system for that length of time.

So nuclear accidents are unique. An accident from a repository is very unique in our opinion. I guess I have no firm opinion on an extraordinary nuclear occurrence. I am not sure whether the extension would help, as I assume it probably would.

Mr. VENTO. In other words, you are somewhat indifferent to that, if I can characterize your response at all?

Mr. NELSON. That is right.

Mr. VENTO. I am a little perplexed on the attorney general's comments here, of Mr. Bardacke. In looking at the summary of your statements, you seem to be suggesting that there were a lot of flaws with Price-Anderson, that while you want to extend it, you see, in looking at the highlights of your testimony, you find a lot of flaws with it.

In other words, if it is going to be there, and you sort of do not know whether you are in or out, you are just as soon to have that clarified, is that correct?

Mr. BIGELOW. That is correct, Mr. Vento. As I said, we are locked into an agreement with the DOE regarding the construction of WIPP. The DOE made representations during the CNC agreement with New Mexico that Price-Anderson would cover New Mexico; as you all know, Price-Anderson does not specifically speak to repositories.

Based on these representations and based upon DOE's further representations that they would assist the State in resolving some of the remaining concerns, yes, as long as we have an agreement, as long as they are digging a hole in New Mexico and are going to put waste in it, we would rather have Price-Anderson than nothing.

Mr. VENTO. That is where you are right now. You are in between, and you would like it clarified one way or the other. You think that Price-Anderson is a basic benefit to you?

Mr. BIGELOW. I think if the act were amended to specifically include WIPP or a repository like WIPP, and include the concerns that I mentioned in this testimony, Price-Anderson would be more of a benefit than no Price-Anderson, because we already have the repository.

Mr. VENTO. What if we don't change Price-Anderson, suppose you still say you would rather have the coverage than have it layerified? Absolutely, you get 100 percent Government indemnification, don't you, in case there is an accident that would come before us?

Isn't that what you would be receiving under this repository?

Mr. BIGELOW. No, under section 170(d) of Price-Anderson, if it applies, DOE says it does, we have our doubts, but we will go with their interpretation if the question arises, we would be limitedthe Government indemnification would be the $500 million that is set out in 170(d).

Mr. VENTO. Thank you.

Chairman. I thank you gentlemen. I appreciate your help today.

We will now hear from an industry panel. Mr. Gleason and Mr. Johnson. You may proceed.

[Prepared statement of M.G. Johnson may be found in the appendix.]

PANEL CONSISTING OF GEORGE GLEASON, ON BEHALF OF THE AMERICAN NUCLEAR ENERGY COUNCIL, EDISON ELECTRIC INSTITUTE, AND THE ATOMIC INDUSTRIAL FORUM; AND M.G. JOHNSON, ON BEHALF OF PRICE-ANDERSON CONTRACTORS POLICY STUDY

Mr. GLEASON. Thank you, Mr. Chairman.

My name is George Gleason, executive vice president of the American Nuclear Energy Council, and our statement today is on behalf of the American Nuclear Energy Council, the Edison Electric Institute and the Atomic Industrial Forum.

My testimony will address the issue of coverage under Price-Anderson for the commercial nuclear facilities under section 170(c) of the Price-Anderson act, and Mr. Johnson will address the DOE contract or provision pursuant to 170(d) of the Atomic Energy act.

Mr. MCCAIN. Excuse me.

Mr. Chairman, I have a statement here from Mr. Griffith.

Mr. GLEASON. Yes, sir. I was just going to note that I am appearing here today in the absence of Steve Griffith who is the senior vice president and general counsel of Duke Power Co., who was unable to be here today, and he sends his apologies.

Mr. Griffith is chairman of the Industry-Wide Working Group on Price-Anderson and he would have been the industry's lead witness had he been available today.

I should note that I am also accompanied today by Joseph Knotts, Jr., who is a partner in the Washington law firm of Bishop, Leiberman, Cook, Purcell & Reynolds, a Washington law firm, and Mr. Knotts, as I said, is counsel to our working group.

Mr. Chairman, I would like to submit Mr. Griffith's prepared statement for the record, and briefly summarize our position and respond to a couple of points that have been made.

[Prepared statement of Steve C. Griffith may be found in the appendix.]

The CHAIRMAN. That will be acceptable. And noting your opening comments to the NRC Commissioners about the high level which had been conducted in this hearing so far, I can assure you that I would like to keep it on that level.

This is somewhat different than some of the raucus confrontations we have had over nuclear issues in the past, and we will try to keep it on that very high level.

Let us avoid any references to Bulgaria.

Mr. GLEASON. Mr. Chairman, I would also like to submit for the record a copy of the study which was performed as an independent study for the various industry associations by the Columbia University Legislative Drafting Fund.

Mrs. Rockett, who is the project director, will be appearing as a witness later in this hearing.

The CHAIRMAN. We will be glad to have that.

[EDITOR'S NOTE.-The above mentioned study entitled "Financial Protection Against Nuclear Hazards: Thirty Years Experience Under the Price-Anderson Act" may be found in the appendix. See table of contents for page number.]

Mr. GLEASON. I would also like to submit for the record a copy of the document entitled, "Background Info Questions and Answers on Price-Anderson," which go into the details of a lot of the provisions of Price-Anderson.

[EDITOR'S NOTE.-The above mentioned document entitled "Background Info Questions and Answers on Price-Anderson" may be found in the appendix. See table of contents for page number.]

Mr. GLEASON. And finally, if the chairman thinks it is appropriate, I would like to submit for the record a copy of a letter which I have from the National Rural Electric Cooperative Association addressed to you, Mr. Chairman, which supports the testimony which we will give today.

The CHAIRMAN. All of those will be part of our official hearing record. We appreciate it.

[EDITOR'S NOTE.-The letter referred to above may be found in the appendix. See table of contents for page number.]

Mr. GLEASON. Thank you.

Briefly, we agree with the recommendations which the NRC and the DOE have made that Price-Anderson should be extended to cover reactors after the expiration date of August 1, 1987. We believe that Price-Anderson has proved to be a very economically efficient system for channeling liability in the case of a nuclear accident.

PURPOSES AND OBJECTIVES OF PRICE-ANDERSON

If one might examine what the situation would be in the absence of Price-Anderson and what Price-Anderson was intended to do, basically, if we did not have a Price-Anderson potential claimants would be thrown back on existing State tort law, where they would have very, very substantial impediments to recover.

The primary objective of Price-Anderson was to provide adequate compensation to victims in the case of a nuclear accident. It accomplishes that purpose very well by providing as we saw at Three Mile Island, for emergency funds, even in the absence of proven liability.

In the case of a serious nuclear incident, by removing potential defenses which would be available, and would pose very substantial bars to claimants. It clears away the hassle related to finding out which court you ought to be in and all of these, as Price-Anderson has evolved over the years, have greatly improved the situation of the public in the case of a nuclear accident.

I think that the true test of that is-I do not want to speak for critics who will come later in the hearing, but even the critics do not want to do away with Price-Anderson because they know that it is a system that does provide substantial benefits to the public in the case of an unfortunate nuclear accident.

We are far better off with it. That is the primary justification for Price-Anderson. If we have a nuclear accident, the public is far better off with Price-Anderson that they would be without it.

Now, we are arguing about some of the principal features of Price-Anderson in terms of the limitation and liability, whether there should be a limitation, what that limitation should be, whether there should be an ENO or whatnot, and that is what I really want to address here, but I think that we all should agree that Price-Anderson makes sense, and clearly, it should be extended beyond its deadline.

FUTURE NUCLEAR REACTORS

Now, a question has come up about whether or not we are going to have any more nuclear reactors ordered in the future, whether Congress even ought to go through the process of extending it.

Whether there are going to be nuclear reactors in the future or not is really not going to depend exclusively on the availability of Price-Anderson, but would it be reasonable, should we have orders in the future, and we fully expect to have orders in the future, a substantial number of them, would it be reasonable to have a different set of legal liabilities for a reactor ordered after 1987 than one before?

And I do not think that you can really come up with a rationale that would say we ought to have a different set of rules applying in the future than we have in the past. So, whatever the rules are, they ought to apply both to existing reactors and to future reactors on the same basis.

NRC PROPOSAL

We oppose the NRC recommendation with respect to the limitation on liability, which really has two parts to it. The one part would remove the overall ceiling on liability which now exists.

The second part would impose, in place of that, a $10 million annual assessment until all liability claims are paid off.

In other words, unlimited liability.

Let me address the first issue, which is the limitation on liability. Price-Anderson is a very finely balanced set of provisions which, as I said, does provide the public with adequate protection in the time of an accident better than they would have without it. The limitation on liability is an integral part of that. You might think of it as a highrise, fine architecturally structured building. And the limitation on liability is part of the foundation of that.

And if you were to remove that, you could not do it without intimately impacting on the other provisions. So, when you assess what you ought to do with the limitation on liability, you have to look at it in terms of the whole package which Price-Anderson presents and it is the limitation on liability which really provides the mechanism whereby you achieve the economic efficiencies of PriceAnderson.

The essence of Price-Anderson is the channeling of economic liability to the licensee. You are an injured party. You go out and you have to determine who to sue, and then collect the money from them, and the guy you sue may be a little pump manufacturer who does not have any assets.

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