Views on S. 1606 and Status of Cleanup Effort at Three Mile Island

GAO discussed its views on S. 1606 and the status of the cleanup effort at the Three Mile Island (TMI) nuclear generating station, the financial condition of the General Public Utilities Corporation (GPU), and ratepayer costs under various funding options. Some progress has been made toward cleaning up TMI-2, but more funding is needed. The net income level of GPU remained the same as it was the year before. However, accounting adjustments for extraordinary gains and losses resulted in a net loss for GPU of nearly $16 million for the year. The only source of external financing has been the Revolving Credit Agreement loans from the 45-member banking consortium. The potential for GPU bankruptcy at this time appears to be unlikely. GAO believes that too many uncertainties exist in a utility bankruptcy to make it a viable option to resolve the financial difficulties of GPU. The TMI-2 cleanup cost and completion schedule has slipped steadily since the initial estimate was developed, and costs have escalated to over $1 billion dollars. The major cleanup activity has revolved around decontaminating the auxiliary building and treating the contaminated waste water resulting from the accident. TMI-2 involves removing the damaged fuel core and TMI-3 covers the decontamination of the entire interior of the containment building. Work on gaining access to the reactor has started and the decontamination experiments may be completed this year. Financial support for the cleanup tasks could come from research and development funds, but their use is largely contingent upon the ability of GPU to undertake and partially fund the work tasks that lend themselves to research and development activities. The proposed amendments to S. 1606 provide a mechanism by which the electric utility industry can implement its commitment to share in the TMI-2 cleanup costs. This cost-sharing concept is one that GAO has supported. If the utility industry cannot keep its commitment to provide funds for the cleanup costs, there are few viable alternative funding sources. Possibly, the only reasonable alternative is an increase in revenues from ratepayers.