Financial and Operational Problems at Three Mile Island

Gao ID: 116558 September 22, 1981

GAO was asked to respond to several issues concerning H.R. 2512 as it relates to cleanup activities at Three Mile Island (TMI) following the nuclear radiation leak there. H.R. 2512 encompasses two critical issues stemming from the TMI accident, increased insurance coverage and cleanup funding, both of which need immediate resolution. Passage of H.R. 2512 is premature and requires establishing an organization that is not needed. The current proposal for funding the cleanup needs to be given an opportunity to be developed. Total costs for cleanup are estimated to be about $1,034 billion, with an estimated $570 million unfunded balance expected at the end of 1981. The Department of Energy (DOE) is proposing an extensive multiyear research and development effort. GAO believes that this is a worthwhile program, will greatly benefit both the federal regulatory agencies and the utility industry, and should be accorded full congressional support. To date, General Public Utilities Corporation (GPU) customers have not been charged with any of the cleanup costs. However, customers have had to pay $202 million more than they would have if the accident had not happened because higher cost replacement energy was required to economically meet system needs. With few exceptions, all accident cleanup costs have been paid from insurance proceeds. No entity other than GPU shareholders has provided any direct financial assistance. Indirect costs to federal agencies will total about $275 million by the end of 1981. Further, 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. Thus, early core removal would be economically advantageous to both GPU and its customers. GAO believes that 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 the private sector will be able to achieve this, the responsibility for determining adequate levels of coverage and the best way to do it rest 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.

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