APPENDIX MONDAY, JUNE 11, 1984 ADDITIONAL MATERIAL SUBMITTED FOR THE HEARING RECORD U.S. HOUSE OF REPRESENTATIVES COMMITTEE ON INTERIOR AND INSULAR AFFAIRS HEARING ON H.R. 421, H.R. 3277, AND THE NUCLEAR REGULATORY COMMISSION (NRC) REPORT ON THE PRICE-ANDERSON ACT STATEMENT OF THE HON. MORRIS K. UDALL, CHAIRMAN Monday, June 11, 1984 This morning we are gathered here to ring the opening bell for the next round of the Price-Anderson debate. This hearing was called to explore some new proposals that have entered the ring. My colleagues John Seiberling and Ted Weiss have each introduced bills which would make significant changes in the Price-Anderson system. The report which the NRC published last December also contained some innovative recommendations. We are going to hear from a great number of people today who represent a wide variety of interests, and I hope they all will comment on these proposals. Before we begin, I'd like to make a few brief comments on where we have been with Price-Anderson and where we are going. In the thirty years since the original Price-Anderson Act was enacted, the number of commercial reactors has grown to 85. The percentage of electricity generated by nuclear energy has risen to about 13 percent. The industry is no longer in its infancy--you might say it has reached middle age. The intent behind the original Price-Anderson legislation was twofold: Congress acted to encourage private development of nuclear energy and to provide an orderly system to compensate the public in the event of a nuclear accident. So far it appears that the act has achieved both purposes. This may Another change is that since 1978 there have been no new orders for nuclear power plants, and the NRC says that none are likely to be ordered in the foreseeable future. suggest that perhaps there is no need to extend the Act since there will not be any new reactors. If the act is not extended beyond 1987, current reactors (which is to say those licensed before 1987) will continue to covered by the provisions of the Act. The nuclear industry, however, says that even though they are now a mature industry there is still a need for a limit on liability. They point to the fact that the NRC and others still say there is a very small chance of a very large accident that could produce astronomical damages claims. This small chance of an accident which could mean bankruptcy for a utility or a contracor is still, according to the industry, disincentive to participation in the nuclear sector. a It is also asserted that the Act has been very successful in providing prompt, orderly processing and satisfaction of claims, particularly the claims arising out of the Three Mile Island accident. Besides the benefits offered to the public, many argue that extension of the Act is necessary to allow the hundreds of nuclear contractors who work for the Nuclear Regulatory Commission and the Department of Energy to remain in the field. On the other hand, many economists and environmentalists and some of my colleagues argue that the limit on liability disrupts the energy markets. They claim that we are not paying the true cost for the electricity we generate with nuclear power. I think everyone recognizes that times have changed since the last extension of the act. The Committee has some innovative proposals before it today which take into account these changes. The Committee will hear from representatives of many groups. It is my hope that we can find out where all of you are and whether your positions have changed since we heard from you last. STATEMENT OF U.S. NUCLEAR REGULATORY COMMISSION, HON. NUNZIO MR. CHAIRMAN, I AM PLEASED TO HAVE THIS OPPORTUNITY TO APPEAR BEFORE THE SUBCOMMITTEE TO TESTIFY ON THE PRICE-ANDERSON ACT AND THE NRC'S DECEMBER 1983 REPORT TO CONGRESS ENTITLED, "THE PRICE-ANDERSON ACT - THE THIRD DECADE." MY TESTIMONY IS DIVIDED INTO THREE PARTS. FIRST, I WILL BRIEFLY DESCRIBE THE PRICE ANDERSON ACT IN GENERAL. SECOND, I WILL DISCUSS THE PRICE-ANDER SON REPORT SUBMITTED IN DECEMBER OF LAST YEAR. FINALLY, I WILL COMMENT ON H.R. 3277 AND H.R. 421. THIS NATION'S DECISION, IN THE MID-1950S, TO DEVELOP THE PEACEFUL USES OF THE ATOM THROUGH PRIVATE ENTERPRISE PRESENTED TWO BROAD POLICY ISSUES RELATING TO COMPENSATION FOR DAMAGES SUFFERED BY THE PUBLIC IN THE EVENT OF A NUCLEAR ACCIDENT: How TO ENCOURAGE PRIVATE INDUSTRY TO ENTER A FIELD IN WHICH POTENTIAL LIABILITY FROM LOW PROBABILITY ACCIDENTS WITH POSSIBLY HIGH CONSEQUENCES MIGHT ACT AS A SUBSTANTIAL DETERRENT; AND HOW TO COMPENSATE THE PUBLIC ADEQUATELY FOR DAMAGES WHICH MIGHT RESULT IN THE EVENT OF A SERIOUS NUCLEAR ACCIDENT. THE PRICE-ANDERSON ACT WAS THE LEGISLATION DEVELOPED TO MEET THESE PROBLEMS. INITIALLY ENACTED IN 1957 FOR A TEN-YEAR PERIOD, THE ACT WAS AMENDED AND EXTENDED IN 1965 AND IN 1975, AND WILL EXPIRE ON AUGUST 1, 1987 ABSENT CONGRESSIONAL ACTION. THE ACT REQUIRES LICENSEES OF COMMERCIAL NUCLEAR POWER PLANTS HAVING A RATED CAPACITY OF 100,000 ELECTRICAL KILOWATTS OR MORE TO PROVIDE PROOF TO THE NRC THAT THEY HAVE FINANCIAL PROTECTION IN THE FORM OF PRIVATE NUCLEAR INSURANCE, OR IN SOME OTHER FORM APPROVED BY THE COMMISSION, IN AN AMOUNT EQUAL TO THE MAXIMUM AMOUNT OF LIABILITY INSURANCE AVAILABLE AT REASONABLE COST AND ON REASONABLE TERMS FROM PRIVATE SOURCES. THAT FINAN CIAL PROTECTION, CURRENTLY $585 MILLION, CONSISTS OF A PRIMARY LAYER OF NUCLEAR LIABILITY INSURANCE OF $160 MILLION AND A SECONDARY RETROSPECTIVE PREMIUM INSURANCE LAYER. IN THE EVENT OF A NUCLEAR ACCIDENT CAUSING DAMAGES EXCEEDING $160 MILLION, THE LICENSEE OF EACH COMMERCIAL NUCLEAR POWER PLANT LICENSED TO OPERATE WOULD BE ASSESSED A PRORATED SHARE OF DAMAGES IN EXCESS 38-299 0-84-8 |