Financial and Operational Problems at Three Mile Island

S. 1606 addresses two critical issues made evident by the Three Mile Island (TMI) accident which need immediate resolution: the need for increased insurance coverage, and cleanup funding. Passage of the proposed legislation is premature; however, because it requires federal involvement that is not needed at this time. Several alternative proposals should be given the opportunity to be developed. The Department of Energy has proposed an extensive multiyear research and development effort at TMI. GAO believes that this is a worthwhile program and will greatly benefit both the federal regulatory agencies and the utility industry. Utility customers have not been charged with any of the cleanup costs to date. However, customers have had to pay more than they would have if the accident had not happened because higher cost replacement energy was required to meet the system needs. With few exceptions, all accident cleanup costs to date have been paid from insurance proceeds. No entity other than the utility company shareholders has provided any direct financial assistance. However, indirect costs to federal agencies as a result of the accident will total about $275 million by the end of 1981. GAO found no reason why the reactor core should not be removed as expeditiously as possible. While posing no immediate safety hazard, the current status of the reactor has the elements for additional safety problems. The single most important step to adequately finance any future accident recovery effort is to increase the present level of property insurance coverage. While it appears that the private sector will be able to achieve this, the responsibility for determining adequate levels of coverage and the best way to do it rests with the Nuclear Regulatory Commission. An improved regulatory climate at both federal and state levels could help reduce future costs by reducing the time for cleanup activities.