Representative Moss. Mr. Chairman, for clarity here, is it not a fact that this will supersede and you will be without a contract with TVA until a separate contract is negotiated with TVA? Mr. GREER. No, sir. That is not the case. Counsel is here, and he can address that if you would like. Mr. SIDES. Appendix D of the existing contract sets out the terms and conditions and obligations of TVA in some detail to operate the plant. Appendix D of the modified contract is essentially the same document and the intent of both ERDA and TVA is simply to take those substantive provisions and negotiate a separate free-standing contractual arrangement for operation. There is no intention whatsoever to change the substantive obligations of the TVA to operate this plant. The provisions are already there as a part of the contract. They will remain a part of the contract. It is just a matter of negotiating appendix D of the existing contract into a separate form. Senator MONTOYA. What you are saying is that TVA is already under a binding contract. Mr. SIDES. Yes. Senator MONTOYA. If any modification is made to the obligations under the existing contract, then they will have to be negotiated with TVA and if negotiated they will supersede the existing obligations of TVA. Mr. SIDES. That is correct. But until that is done TVA is obligated and will continue to be obligated under the existing contract to operate this plant. Dr. SEAMANS. Dr. Cunningham. STATEMENT OF G. W. CUNNINGHAM, DEPUTY DIRECTOR FOR TECHNOLOGY, DIVISION OF REACTOR DEVELOPMENT AND DEMONSTRATION, ERDA Dr. CUNNINGHAM. Thank you, Mr. Chairman. With your permission I will enter my statement into the record and will summarize from a series of viewgraphs we would like to show you. [Prepared statement of G. W. Cunningham follows:] STATEMENT BY DR. G. W. CUNNINGHAM DEPUTY DIRECTOR FOR TECHNOLOGY DIVISION OF REACTOR DEVELOPMENT AND DEMONSTRATION JOINT COMMITTEE ON ATOMIC ENERGY APRIL 14, 1976 INTRODUCTION Thank you, Mr. Chairman and members of the Joint Committee, I would like to discuss the proposed modifications to the CRBRP Project contract, elaborating upon Dr. Seamans opening statement and addressing specifically those issues which have been identified as being of particular interest. We are convinced that this revised contract, with ERDA taking over management control of the project, provides a sound and workable basis for proceeding with our partners to design, license, construct, test, and operate this demonstration plant. It provides a meaningful role for our utility partners in recognition that their active participation is essential to achieving project objectives and that they are providing a substantial financial contribution of about $250 million. CRBRP PROJECT OBJECTIVES As At this time I would like to review the key project objectives. indicated in Figure 1, the CRBRP Project is to demonstrate safe, clean and reliable operation in a utility environment. Successful operation of an LMFBR in a utility environment is an essential step in the ERDA plan to demonstrate that the LMFBR energy option will be acceptable for CRBRP - OBJECTIVES • TO DEMONSTRATE SAFE, CLEAN AND RELIABLE LMFBR OPERATION WITH HIGH AVAILABILITY IN A UTILITY ENVIRONMENT. • TO DEVELOP INDUSTRIAL AND UTILITY CAPABILITIES TO DESIGN, CONSTRUCT, OPERATE AND MAINTAIN A LARGE LMFBR. • TO DEMONSTRATE ENVIRONMENTAL ACCEPTABILITY AND THE COMMERCIAL LICENSABILITY OF LMFBR'S. • TO FOCUS THE DEVELOPMENT OF LMFBR SYSTEMS AND COMPONENTS. • TO PROVIDE KEY STEP TO COMPETITIVE, SELF-SUSTAINING LMFBR INDUSTRY. FIGURE 1 future commercialization. The Program is now in that important transition phase from laboratory to industry. It is essential that industry be heavily involved at this point, just as is required in the commercial introduction of any complex technology. The Clinch River Project forms the essential keystone for the bridge that enables this transition. The technology must now be demonstrated in a manner which involves the ultimate customer--the utilities and the industrial designers, constructors and equipment suppliers. The CRBRP is intended to serve as the focal point for this transition; it is a reasonable extrapolation in size and performance under existing state-of-the-art; it provides the vehicle for addressing regulatory issues; and it provides essential experience for the utilities in design, construction, operation and maintenance of LMFBR's. These objectives have been discussed in substantial detail with the Joint Committee in the past and reflect the collective viewpoints of the nuclear community including the national laboratories, the utilities and the industrial sector. The project activities to date have been largely related to firming up the design, establishing a realistic estimate of cost and schedule, procuring long lead materials and components, proceeding with licensing activities, and continuing research and development related to CRBRP. Site work is scheduled to begin in November 1976 after receipt of a Limited Work Authorization (LWA) from the Nuclear Regulation Commission (NRC) with construction to follow some fifteen months later. CRBRP is expected to be operational in 1983. PROJECT ARRANGEMENTS The Clinch River Breeder Reactor Plant Project has been under contract among ERDA/AEC, Commonwealth Edison Company, the Tennessee Valley Authority (TVA), and Project Management Corporation (PMC) since July 1973. The initial agreement placed overall project management responsibility with PMC, a corporation formed especially for that purpose. Lead roles were defined for the utilities represented by PMC, for ERDA (then AEC), and for TVA. PMC was responsible for overall integration of all phases of the project and balance of plant acquisition (turbine generator, electrical switchgear, etc.), ERDA was responsible to PMC for supervising the acquisition of the nuclear steam supply system and TVA was to operate the plant. It should be noted that ERDA's management of the Base R&D Program is not part of the contractual arrangement between the parties. The present CRBRP Project Management arrangement is shown in Figure 2. This arrangement has been in effect since the inception of the project. As discussed in the March 10, 1975, letter from Dr. Seamans to Senator Pastore, this arrangement does not efficiently utilize the combined resources of ERDA and utility personnel involved in the project because of the split and overlap in responsibilities between ERDA and PMC. Further, the lines of authority for decision making are not direct and in some cases require committee action. As the project design, cost and schedule became firm, the magnitude and complexity of the job led ERDA, PMC, CE and TVA to agree that the conduct |