Nuclear Regulation
NRC's Liability Insurance Requirements for Nuclear Power Plants Owned by Limited Liability Companies Gao ID: GAO-04-654 May 28, 2004An accident at one the nation's commercial nuclear power plants could result in human health and environmental damages. To ensure that funds would be available to settle liability claims in such cases, the Price-Anderson Act requires licensees for these plants to have primary insurance--currently $300 million per site. The act also requires secondary coverage in the form of retrospective premiums to be contributed by all licensees to cover claims that exceed primary insurance. If these premiums are needed, each licensee's payments are limited to $10 million per year and $95.8 million in total for each of its plants. In recent years, limited liability companies have increasingly become licensees of nuclear power plants, raising concerns about whether these companies--by shielding their parent corporations' assets--will have the financial resources to pay their retrospective premiums. GAO was asked to determine (1) the extent to which limited liability companies are the licensees for U.S. commercial nuclear power plants, (2) the Nuclear Regulatory Commission's (NRC) requirements and procedures for ensuring that licensees of nuclear power plants comply with the Price-Anderson Act's liability requirements, and (3) whether and how these procedures differ for licensees that are limited liability companies.
Of the 103 operating nuclear power plants, 31 are owned by 11 limited liability companies. Three energy corporations--Exelon, Entergy, and the Constellation Energy Group--are the parent companies for eight of these limited liability companies. These 8 subsidiaries are the licensees or colicensees for 27 of the 31 plants. NRC requires all licensees for nuclear power plants to show proof that they have the primary and secondary insurance coverage mandated by the Price-Anderson Act. Licensees obtain their primary insurance through American Nuclear Insurers. Licensees also sign an agreement with NRC to keep the insurance in effect. American Nuclear Insurers also has a contractual agreement with each of the licensees to collect the retrospective premiums if these payments become necessary. A certified copy of this agreement, which is called a bond for payment of retrospective premiums, is provided to NRC as proof of secondary insurance. It obligates the licensee to pay the retrospective premiums to American Nuclear Insurers. NRC does not treat limited liability companies differently than other licensees with respect to the Price-Anderson Act's insurance requirements. Like other licensees, limited liability companies must show proof of both primary and secondary insurance coverage. American Nuclear Insurers also requires limited liability companies to provide a letter of guarantee from their parent or other affiliated companies with sufficient assets to pay the retrospective premiums. These letters state that the parent or affiliated companies are responsible for paying the retrospective premiums if the limited liability company does not. American Nuclear Insurers informs NRC it has received these letters. In light of the increasing number of plants owned by limited liability companies, NRC is studying its existing regulations and expects to report on its findings by the end of summer 2004. In commenting on a draft of this report, NRC stated that it accurately reflects the present insurance system for nuclear power plants.
GAO-04-654, Nuclear Regulation: NRC's Liability Insurance Requirements for Nuclear Power Plants Owned by Limited Liability Companies
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Report to Congressional Requesters:
May 2004:
Nuclear Regulation:
NRC's Liability Insurance Requirements for Nuclear Power Plants Owned
by Limited Liability Companies:
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-04-654]:
GAO Highlights:
Highlights of GAO-04-654, a report to congressional requesters
Why GAO Did This Study:
An accident at one the nation‘s commercial nuclear power plants could
result in human health and environmental damages. To ensure that funds
would be available to settle liability claims in such cases, the Price-
Anderson Act requires licensees for these plants to have primary
insurance”currently $300 million per site. The act also requires
secondary coverage in the form of retrospective premiums to be
contributed by all licensees to cover claims that exceed primary
insurance. If these premiums are needed, each licensee‘s payments are
limited to $10 million per year and $95.8 million in total for each of
its plants. In recent years, limited liability companies have
increasingly become licensees of nuclear power plants, raising concerns
about whether these companies”by shielding their parent corporations‘
assets”will have the financial resources to pay their retrospective
premiums.
GAO was asked to determine (1) the extent to which limited liability
companies are the licensees for U.S. commercial nuclear power plants,
(2) the Nuclear Regulatory Commission‘s (NRC) requirements and
procedures for ensuring that licensees of nuclear power plants comply
with the Price-Anderson Act‘s liability requirements, and (3) whether
and how these procedures differ for licensees that are limited
liability companies.
What GAO Found:
Of the 103 operating nuclear power plants, 31 are owned by 11 limited
liability companies. Three energy corporations”Exelon, Entergy, and the
Constellation Energy Group”are the parent companies for eight of these
limited liability companies. These 8 subsidiaries are the licensees or
co-licensees for 27 of the 31 plants.
NRC requires all licensees for nuclear power plants to show proof that
they have the primary and secondary insurance coverage mandated by the
Price-Anderson Act. Licensees obtain their primary insurance through
American Nuclear Insurers. Licensees also sign an agreement with NRC to
keep the insurance in effect. American Nuclear Insurers also has a
contractual agreement with each of the licensees to collect the
retrospective premiums if these payments become necessary. A certified
copy of this agreement, which is called a bond for payment of
retrospective premiums, is provided to NRC as proof of secondary
insurance. It obligates the licensee to pay the retrospective premiums
to American Nuclear Insurers.
NRC does not treat limited liability companies differently than other
licensees with respect to the Price-Anderson Act‘s insurance
requirements. Like other licensees, limited liability companies must
show proof of both primary and secondary insurance coverage. American
Nuclear Insurers also requires limited liability companies to provide a
letter of guarantee from their parent or other affiliated companies
with sufficient assets to pay the retrospective premiums. These letters
state that the parent or affiliated companies are responsible for
paying the retrospective premiums if the limited liability company does
not. American Nuclear Insurers informs NRC it has received these
letters. In light of the increasing number of plants owned by limited
liability companies, NRC is studying its existing regulations and
expects to report on its findings by the end of summer 2004.
In commenting on a draft of this report, NRC stated that it accurately
reflects the present insurance system for nuclear power plants.
www.gao.gov/cgi-bin/getrpt?GAO-04-654.
To view the full product, including the scope and methodology, click on
the link above. For more information, contact Jim Wells at
202-512-3841.
[End of section]
Contents:
Letter:
Results in Brief:
Background:
Limited Liability Companies Are Licensees for 31 of the 103 Operating
Commercial Nuclear Power Plants in the United States:
NRC Has Specific Requirements and Procedures to Ensure That All
Licensees Comply with the Price-Anderson Act's Liability Provisions:
NRC Treats Limited Liability Companies the Same as Other Licensees, but
the Insurance Industry Has Added Important Requirements for These
Companies:
Agency Comments:
Scope and Methodology:
Appendixes:
Appendix I: Nuclear Power Plant Ownership:
Appendix II: Comments from the Nuclear Regulatory Commission:
Table:
Table 1: Limited Liability Companies Licensed to Operate Nuclear Power
Plants and Their Parent Companies:
Letter May 28, 2004:
Congressional Requesters:
An accident at one of the nation's 103[Footnote 1] operating commercial
nuclear power plants could result in human health and environmental
damages. The Price-Anderson Act was enacted in 1957 to ensure that
funds would be available for at least a portion of the damages suffered
by the public in the event of an incident at a U.S. nuclear power
plant. The act requires each licensee of a nuclear plant to have
primary insurance coverage equal to the maximum amount of liability
insurance available from private sources--currently $300 million--to
settle any such claims against it. In the event of an accident at any
plant where liability claims exceed the $300 million primary insurance
coverage, the act also requires licensees for all plants to pay
retrospective premiums (also referred to as secondary insurance). Under
current U.S. Nuclear Regulatory Commission (NRC) regulations, these
payments could amount to a maximum of $95.8 million for each of a
licensee's plants per incident. If claims for an incident exceed this
approximately $10 billion currently available in primary insurance and
retrospective premiums, NRC may request additional funds from the
Congress. To operate a nuclear power plant, the owner must obtain a
license from NRC and meet its regulatory requirements, including those
for liability insurance established under the Price-Anderson Act.
A major aspect of the deregulation or restructuring of the U.S.
electricity industry in the 1990s was the separation of electricity
generation from transmission and distribution. Utilities could create
separate entities or subsidiaries to operate their generation
facilities, including nuclear power plants, or could sell them off to
other companies. Energy holding companies bought some of the generation
facilities, sometimes placing them under subsidiaries. The limited
liability company also emerged in the 1990s as a new type of company
structure in the United States. These companies have characteristics of
both a partnership and a corporation. Like a partnership, the profits
are passed through and taxable to the owners, known as members; like a
corporation, it is a separate and distinct legal entity and its owners
are insulated from personal liability for its debts and liabilities.
You asked us to determine (1) the extent to which limited liability
companies are the licensees for U.S. commercial nuclear power plants,
(2) NRC's requirements and procedures for ensuring that licensees of
nuclear power plants comply with the Price-Anderson Act's liability
requirements, and (3) whether and how these procedures differ for
licensees that are limited liability companies. To respond to your
request, we reviewed applicable sections of the Price-Anderson Act and
NRC's implementing regulations and written procedures. We also held
discussions with and obtained information from responsible NRC
officials and representatives of American Nuclear Insurers, which is a
joint underwriting association of 50 insurance companies that provides
insurance coverage to the nuclear power plants. These are property/
casualty insurance companies licensed to do business in at least one of
the states or territories of the United States. We performed our work
between April 2003 and April 2004 in accordance with generally accepted
government auditing standards.
Results in Brief:
Thirty-one of the 103 operating commercial nuclear power plants
nationwide are licensed to limited liability companies. Four of the 31
plants are licensed jointly to two limited liability companies. A total
of 11 limited liability companies are licensed to own nuclear power
plants. One--the Exelon Generation Company, LLC--is the licensee for 12
plants and co-licensee for 4 plants. The 10 other limited liability
companies are the licensees or co-licensees for one to five plants.
Three energy corporations--Exelon, Entergy, and the Constellation
Energy Group--are the parent companies for eight of the limited
liability companies. These eight subsidiaries are the licensees or co-
licensees for 27 of the 31 plants.
NRC's procedures for ensuring that licensees comply with Price-Anderson
Act liability insurance provisions include requirements that licensees
provide proof of primary and secondary insurance coverage. NRC requires
each licensee to show proof that it has liability insurance that
includes the $300 million of primary insurance coverage per site
required by the Price-Anderson Act. NRC and the licensee also sign an
indemnity agreement that requires the licensee to maintain an insurance
policy in this amount. This agreement is in effect as long as the owner
is licensed to operate the plant. NRC relies on American Nuclear
Insurers--the joint underwriting association that provides insurance
for U.S. nuclear power plants--to send NRC the annual endorsements
documenting proof of insurance after the licensees have paid their
annual premiums. In addition to the primary insurance coverage,
licensees must also show proof of secondary insurance to NRC. This
secondary insurance is in the form of retrospective premiums that, in
the event of a nuclear incident causing damages exceeding $300 million,
would be collected from each nuclear power plant licensee at a rate of
up to $10 million per year and up to a maximum of $95.8 million per
incident for each nuclear power plant. Typically, each licensee signs a
bond for payment of retrospective premiums as proof of the secondary
insurance and furnishes NRC with a certified copy. This bond is a
contractual agreement between the licensee and American Nuclear
Insurers that obligates the licensee to pay American Nuclear Insurers
the retrospective premiums. In the event that claims exhaust primary
coverage, American Nuclear Insurers would collect the retrospective
premiums. If a licensee did not pay its share of these retrospective
premiums, American Nuclear Insurers would, under its agreement with the
licensees, pay up to $30 million of the premiums in 1 year and attempt
to collect this amount later from the licensees.
NRC does not treat limited liability companies differently than other
licensees of nuclear power plants with respect to Price-Anderson Act
liability requirements. All licensees follow the same regulations and
procedures regardless of whether they are limited liability companies.
Like other licensees, limited liability companies are required to show
that they are maintaining $300 million in primary insurance coverage,
and they provide NRC a copy of the bond for payment of retrospective
premiums. While NRC does not conduct in-depth financial reviews
specifically to determine licensees' ability to pay retrospective
premiums, when a licensee applies for a license or when the license is
transferred, NRC reviews the licensee's financial ability to safely
operate the plant and to contribute decommissioning funds for the
future retirement of the plant. According to NRC officials, if
licensees have the financial resources to cover these two expenses,
they are likely to be capable of paying their retrospective premiums.
American Nuclear Insurers goes further than NRC and requires limited
liability companies to provide a letter of guarantee from their parent
or other affiliated companies with sufficient assets to cover the
retrospective premiums. These letters state that the parent or an
affiliated company is responsible for paying the retrospective premiums
if the limited liability company does not. American Nuclear Insurers
informs NRC that it has received these letters of guarantee.
Recognizing that limited liability companies are becoming more
prevalent as owners of nuclear power plants, NRC is examining whether
it needs to revise any of its regulations and procedures for these
companies. NRC estimates the study will be completed by the end of
summer 2004.
In commenting on a draft of this report, NRC stated that it accurately
reflects the present insurance system for nuclear power plants.
Background:
The Atomic Energy Act of 1954 authorized a comprehensive regulatory
program to permit private industry to develop and apply atomic energy
for peaceful uses, such as generating electricity from privately owned
nuclear power plants. Soon thereafter, government and industry experts
identified a major impediment to accomplishing the act's objective: the
potential for payment of damages resulting from a nuclear accident and
the lack of adequate available insurance. Unwilling to risk huge
financial liability, private companies viewed even the remote specter
of a serious accident as a roadblock to their participating in the
development and use of nuclear power.[Footnote 2] In addition,
congressional concern developed over ensuring adequate financial
protection to the public because the public had no assurance that it
would receive compensation for personal injury or property damages from
the liable party in event of a serious accident. Faced with these
concerns, the Congress enacted the Price-Anderson Act in September
1957. The Price-Anderson Act has two underlying objectives: (1) to
establish a mechanism for compensating the public for personal injury
or property damage in the event of a nuclear accident and (2) to
encourage the development of nuclear power.
To provide financial protection, the Price-Anderson Act requires
commercial nuclear reactors to be insured to the maximum level of
primary insurance available from private insurers. To implement this
provision, NRC periodically revises its regulations to require
licensees of nuclear reactors to increase their coverage level as the
private insurance market increases the maximum level of primary
insurance that it is willing to offer. For example, in January 2003,
NRC increased the required coverage from $200 million to the current
$300 million, when American Nuclear Insurers informed NRC that $300
million per site in coverage was now available in its insurance pool.
In 1975, the Price-Anderson Act was amended to require licensees to pay
a pro-rated share of the damages in excess of the primary insurance
amount. Under this amendment, each licensee would pay up to $5 million
in retrospective premiums per facility it owned per incident if a
nuclear accident resulted in damages exceeding the amount of primary
insurance coverage. In 1988, the act was further amended to increase
the maximum retrospective premium to $63 million per reactor per
incident to be adjusted by NRC for inflation. The amendment also
limited the maximum annual retrospective premium per reactor to $10
million. Under the act, NRC is to adjust the maximum amount of
retrospective premiums every 5 years using the aggregate change in the
Consumer Price Index for urban consumers. In August 2003, NRC set the
current maximum retrospective payment at $95.8 million per reactor per
incident. With 103 operating nuclear power plants, this secondary
insurance pool would total about $10 billion.[Footnote 3]
The Price-Anderson Act also provides a process to deal with incidents
in which the damages exceed the primary and secondary insurance
coverage. Under the act, NRC shall survey the causes and extent of the
damage and submit a report on the results to, among others, the
Congress and the courts. The courts must determine whether public
liability exceeds the liability limits available in the primary
insurance and secondary retrospective premiums. Then the President
would submit to the Congress an estimate of the financial extent of
damages, recommendations for additional sources of funds, and one or
more compensation plans for full and prompt compensation for all valid
claims. In addition, NRC can request the Congress to appropriate funds.
The most serious incident at a U.S. nuclear power plant took place in
1979 at the Three Mile Island Nuclear Station in Pennsylvania. That
incident has resulted in $70 million in liability claims.
NRC's regulatory activities include licensing nuclear reactors and
overseeing their safe operation. Licensees must meet NRC regulations to
obtain and retain their license to operate a nuclear facility. NRC
carries out reviews of financial qualifications of reactor licensees
when they apply for a license or if the license is transferred,
including requiring applicants to demonstrate that they possess or have
reasonable assurance of obtaining funds necessary to cover estimated
operating costs for the period of the license. NRC does not
systematically review its licensees' financial qualifications once it
has issued the license unless it has reason to believe this is
necessary. In addition, NRC performs inspections to verify that a
licensee's activities are properly conducted to ensure safe operations
in accordance with NRC's regulations. NRC can issue sanctions to
licensees who violate its regulations. These sanctions include notices
of violation; civil penalties of up to $100,000 per violation per day;
and orders that may modify, suspend, or revoke a license.
Limited Liability Companies Are Licensees for 31 of the 103 Operating
Commercial Nuclear Power Plants in the United States:
Thirty-one commercial nuclear power plants nationwide are licensed to
limited liability companies. In total, 11 limited liability companies
are licensed to own nuclear power plants. Three energy corporations--
Exelon, Entergy, and the Constellation Energy Group--are the parent
companies for 8 of these limited liability companies. These eight
subsidiaries are licensed or co-licensed to operate 27 of the 31
plants. The two subsidiaries of the Exelon Corporation are the
licensees for 15 plants and the co-licensees for 4 others.
Constellation Energy Group, Inc., and Entergy Corporation are the
parent companies of limited liability companies that are licensees for
four nuclear power plants each. (See table 1.):
Table 1: Limited Liability Companies Licensed to Operate Nuclear Power
Plants and Their Parent Companies:
Limited liability company: Exelon Generation Company, LLC;
Parent company: Exelon Corporation;
Number of plants owned or co-owned: 12.
Limited liability company: AmerGen Energy Company, LLC;
Parent company: Exelon Corporation;
Number of plants owned or co-owned: 3.
Limited liability company: Exelon Generation Company, LLC; PSEG
Nuclear, LLC;
Parent company: Exelon Corporation; Public Service Enterprise Group,
Incorporated;
Number of plants owned or co-owned: 4.
Limited liability company: PSEG Nuclear, LLC;
Parent company: Public Service Enterprise Group, Incorporated;
Number of plants owned or co-owned: 1.
Limited liability company: Calvert Cliffs Nuclear Power Plant, LLC;
Parent company: Constellation Energy Group, Inc.;
Number of plants owned or co-owned: 2.
Limited liability company: Nine Mile Point Nuclear Station, LLC;
Parent company: Constellation Energy Group, Inc.;
Number of plants owned or co-owned: 2.
Limited liability company: Entergy Nuclear Indian Point 2, LLC;
Parent company: Entergy Corporation;
Number of plants owned or co-owned: 1.
Limited liability company: Entergy Nuclear Indian Point 3, LLC;
Parent company: Entergy Corporation;
Number of plants owned or co-owned: 1.
Limited liability company: Entergy Nuclear FitzPatrick, LLC;
Parent company: Entergy Corporation;
Number of plants owned or co-owned: 1.
Limited liability company: Entergy Nuclear Vermont Yankee, LLC;
Parent company: Entergy Corporation;
Number of plants owned or co-owned: 1.
Limited liability company: FPL Energy Seabrook, LLC;
Parent company: FPL Group, Inc.;
Number of plants owned or co-owned: 1.
Limited liability company: PPL Susquehanna, LLC;
Parent company: Pennsylvania Power and Light Company;
Number of plants owned or co-owned: 2.
Source: GAO survey of NRC project managers.
[End of table]
Of all the limited liability companies, Exelon Generation Company, LLC,
has the largest number of plants. It is the licensee for 12 plants and
co-licensee with PSEG Nuclear, LLC, for 4 other plants. For these 4
plants, Exelon Generation owns 43 percent of Salem Nuclear Generating
Stations 1 and 2 and 50 percent of Peach Bottom Atomic Power Stations 2
and 3. (App. I lists all the licensees and their nuclear power
plants.):
NRC Has Specific Requirements and Procedures to Ensure That All
Licensees Comply with the Price-Anderson Act's Liability Provisions:
NRC requires licensees of nuclear power plants to comply with the
Price-Anderson Act's liability insurance provisions by maintaining the
necessary primary and secondary insurance coverage. First, NRC ensures
that licensees comply with the primary insurance coverage requirement
by requiring them to submit proof of coverage in the amount of $300
million. Second, NRC ensures compliance with the requirement for
secondary coverage by accepting the certified copy of the licensee's
bond for payment of retrospective premiums.
All the nuclear power plant licensees purchase their primary insurance
from American Nuclear Insurers. American Nuclear Insurers sends NRC
annual endorsements documenting proof of primary insurance after the
licensees have paid their annual premiums. NRC and each licensee also
sign an indemnity agreement, stating that the licensee will maintain an
insurance policy in the required amount. This agreement, which is in
effect as long as the owner is licensed to operate the plant,
guarantees reimbursement of liability claims against the licensee in
the event of a nuclear incident through the liability insurance. The
agency can suspend or revoke the license if a licensee does not
maintain the insurance, but according to an NRC official, no licensee
has ever failed to pay its annual primary insurance premium and
American Nuclear Insurers would notify NRC if a licensee failed to
pay.[Footnote 4]
As proof of their secondary insurance coverage, licensees must provide
evidence that they are maintaining a guarantee of payment of
retrospective premiums. Under NRC regulations, the licensee must
provide NRC with evidence that it maintains one of the following six
types of guarantees: (1) surety bond, (2) letter of credit, (3)
revolving credit/term loan arrangement, (4) maintenance of escrow
deposits of government securities, (5) annual certified financial
statement showing either that a cash flow can be generated and would be
available for payment of retrospective premiums within 3 months after
submission of the statement or a cash reserve or combination of these,
or (6) such other type of guarantee as may be approved by the
Commission.
Before the late 1990s, the licensees provided financial statements to
NRC as evidence of their ability to pay retrospective
premiums.[Footnote 5] According to NRC officials, in the late 1990s,
Entergy asked NRC to accept the bond for payment of retrospective
premiums that it had with American Nuclear Insurers as complying with
the sixth option under NRC's regulations: such other type of guarantee
as may be approved by the Commission. After reviewing and agreeing to
Entergy's request, NRC decided to accept the bond from all the
licensees as meeting NRC's requirements. NRC officials told us that
they did not document this decision with Commission papers or
incorporate it into the regulations because they did not view this as
necessary under the regulations.
The bond for payment of retrospective premiums is a contractual
agreement between the licensee and American Nuclear Insurers that
obligates the licensee to pay American Nuclear Insurers the
retrospective premiums. Each licensee signs this bond and furnishes NRC
with a certified copy. In the event that claims exhaust primary
coverage, American Nuclear Insurers would collect the retrospective
premiums. If a licensee were not to pay its share of these
retrospective premiums, American Nuclear Insurers would, under its
agreement with the licensees, pay for up to three defaults or up to $30
million in 1 year of the premiums and attempt to collect this amount
later from the defaulting licensees. According to an American Nuclear
Insurers official, any additional defaults would reduce the amount
available for retrospective payments. An American Nuclear Insurers
official told us that his organization believes that the bond for
payment of retrospective premiums is legally binding and obligates the
licensee to pay the premium. Under NRC regulations, if a licensee fails
to pay the assessed deferred premium, NRC reserves the right to pay
those premiums on behalf of the licensee and recover the amount of such
premiums from the licensee.
NRC Treats Limited Liability Companies the Same as Other Licensees, but
the Insurance Industry Has Added Important Requirements for These
Companies:
NRC applies the same rules to limited liability companies that it does
to other licensees of nuclear power plants with respect to liability
requirements under the Price-Anderson Act.
All licensees must meet the same requirements regardless of whether
they are limited liability companies. American Nuclear Insurers applies
an additional requirement for limited liability companies with respect
to secondary insurance coverage in order to ensure that they have
sufficient assets to pay retrospective premiums. Given the growing
number of nuclear power plants licensed to limited liability companies,
NRC is examining the need to revise its procedures and regulations for
such companies.
NRC requires all licensees of nuclear power plants to follow the same
regulations and procedures. Limited liability companies, like other
licensees, are required to show that they are maintaining the $300
million in primary insurance coverage and provide NRC a copy of the
bond for payment of retrospective premiums or other approved evidence
of guarantee of retrospective premium payments. According to NRC
officials, all its licensees, including those that are limited
liability companies, have sufficient assets to cover the retrospective
premiums. While NRC does not conduct in-depth financial reviews
specifically to determine licensees' ability to pay retrospective
premiums, it reviews the licensees' financial ability to safely operate
their plants and to contribute decommissioning funds for the future
retirement of the plants. According to NRC officials, if licensees have
the financial resources to cover these two larger expenses, they are
likely to be capable of paying their retrospective premiums.
American Nuclear Insurers goes further than NRC and requires licensees
that are limited liability companies to provide a letter of guarantee
from their parent or other affiliated companies with sufficient assets
to cover the retrospective premiums. An American Nuclear Insurers
official stated that American Nuclear Insurers obtains these letters as
a matter of good business practice. These letters state that the parent
or an affiliated company is responsible for paying the retrospective
premiums if the limited liability company does not. If the parent
company or other affiliated company of a limited liability company does
not provide a letter of guarantee, American Nuclear Insurers could
refuse to issue the bond for payment of retrospective premiums and the
company would have to have another means to show NRC proof of secondary
insurance. American Nuclear Insurers informs NRC that it has received
these letters of guarantee. The official also told us that American
Nuclear Insurers believes that the letters from the parent companies or
other affiliated companies of the limited liability company licensed by
NRC are valid and legally enforceable contracts.
NRC officials told us that they were not aware of any problems caused
by limited liability companies owning nuclear power plants and that NRC
currently does not regard limited liability companies' ownership of
nuclear power plants as a concern. However, because these companies are
becoming more prevalent as owners of nuclear power plants, NRC is
examining whether it needs to revise any of its regulations or
procedures for these licensees. NRC estimates that it will complete its
study by the end of summer 2004.
Agency Comments:
We provided a draft of this report to NRC for review and comment. In
its written comments (see app. II), NRC stated that it believes the
report accurately reflects the present insurance system for nuclear
power plants. NRC said that we correctly conclude that the agency does
not treat limited liability companies differently than other licensees
with respect to Price-Anderson's insurance requirements. NRC also
stated that we are correct in noting that it is not aware of any
problems caused by limited liability companies owning nuclear power
plants and that NRC currently does not regard limited liability
companies' ownership of nuclear power plants as a concern. In addition,
NRC commented that we agree with the agency's conclusion that all its
reactor licensees have sufficient assets that they are likely to be
able to pay the retrospective premiums. With respect to this last
comment, the report does not take a position on the licensees' ability
to pay the retrospective premiums. We did not evaluate the sufficiency
of the individual licensees' assets to make these payments. Instead, we
reviewed NRC's and the American Nuclear Insurers' requirements and
procedures for retrospective premiums.
Scope and Methodology:
We performed our review at NRC headquarters in Washington, D.C. We
reviewed statutes, regulations, and appropriate guidance as well as
interviewed agency officials to determine the relevant statutory
framework of the Price-Anderson Act. To determine the number of nuclear
power plant licensees that are limited liability companies, we
surveyed, through electronic mail, all the NRC project managers
responsible for maintaining nuclear power plant licenses. We asked them
to provide data on the licensees, including the licensee's name and
whether it was a limited liability company. If it was a limited
liability company, we asked when the license was transferred to the
limited liability company and who is the parent company of the limited
liability company. We received responses for all 103 nuclear power
plants currently licensed to operate. We analyzed the results of the
survey responses. We verified the reliability of the data from a random
sample of project managers by requesting copies of the power plant
licenses and then comparing the power plant licenses to the data
provided by the project managers. The data agreed in all cases. We
concluded that the data were reliable enough for the purposes of this
report.
To determine NRC's requirements for ensuring that licensees of nuclear
power plants comply with the Price-Anderson Act's liability
requirements, we reviewed relevant statutes and NRC regulations and
interviewed NRC officials responsible for ensuring that licensees have
primary and secondary insurance coverage. We also spoke with American
Nuclear Insurers officials responsible for issuing the insurance
coverage to nuclear power plant licensees, and we reviewed relevant
documents associated with the insurance. To determine whether and how
these procedures differ for licensees that are limited liability
companies, we reviewed relevant documents, including NRC regulations,
and interviewed NRC officials responsible for ensuring licensee
compliance with Price-Anderson Act requirements.
As agreed with your offices, unless you publicly announce its contents
earlier, we plan no further distribution of this report until 7 days
from the date of this letter. We will then send copies to interested
congressional committees; the Commissioners, Nuclear Regulatory
Commission; the Director, Office of Management and Budget; and other
interested parties. We will make copies available to others on request.
In addition, the report will be available at no charge on GAO's Web
site at [Hyperlink, http://www.gao.gov].
If you or your staff have any questions about this report, I can be
reached at (202) 512-3841. Major contributors to this report include
Ray Smith, Ilene Pollack, and Amy Webbink. John Delicath and Judy
Pagano also contributed to this report.
Signed by:
Jim Wells,
Director, Natural Resources and Environment:
List of Congressional Requesters:
The Honorable Hillary Rodham Clinton:
The Honorable James M. Jeffords:
The Honorable Harry Reid:
United States Senate:
[End of section]
Appendixes:
Appendix I: Nuclear Power Plant Ownership:
1;
Plant: Arkansas Nuclear One 1;
Licensed to own: Entergy Arkansas, Inc.;
LLC: No.
2;
Plant: Arkansas Nuclear One 2;
Licensed to own: Entergy Arkansas, Inc.;
LLC: No.
3;
Plant: Arnold (Duane) Energy Center;
Licensed to own: Interstate Power and Light;
LLC: No;
Licensed to own: Central Iowa Power Cooperative;
LLC: No;
Licensed to own: Corn Belt Power Cooperative;
LLC: No.
4;
Plant: Beaver Valley Power Station 1;
Licensed to own: Pennsylvania Power Company;
LLC: No.
Licensed to own: Ohio Edison Company;
LLC: No;
Licensed to own: FirstEnergy Nuclear Operating Company;
LLC: No.
5;
Plant: Beaver Valley Power Station 2;
Licensed to own: Pennsylvania Power Company;
LLC: No;
Licensed to own: Ohio Edison Company;
LLC: No;
Licensed to own: Cleveland Electric Illuminating Company;
LLC: No;
Licensed to own: Toledo Edison Company;
LLC: No;
Licensed to own: FirstEnergy Nuclear Operating Company;
LLC: No.
6;
Plant: Braidwood Station 1;
Licensed to own: Exelon Generation Company, LLC;
LLC: Yes;
License transfer date: 1/12/2001;
LLC parent company: Exelon Corporation.
7;
Plant: Braidwood Station 2;
Licensed to own: Exelon Generation Company, LLC;
LLC: Yes;
License transfer date: 1/12/2001;
LLC parent company: Exelon Corporation.
8;
Plant: Browns Ferry Nuclear Power Station 1;
Licensed to own: Tennessee Valley Authority;
LLC: No.
9;
Plant: Browns Ferry Nuclear Power Station 2;
Licensed to own: Tennessee Valley Authority;
LLC: No.
10;
Plant: Browns Ferry Nuclear Power Station 3;
Licensed to own: Tennessee Valley Authority;
LLC: No.
11;
Plant: Brunswick Steam Electric Plant 1;
Licensed to own: Carolina Power & Light Co.;
LLC: No;
Licensed to own: North Carolina Eastern Municipal Power Agency;
LLC: No.
12;
Plant: Brunswick Steam Electric Plant 2;
Licensed to own: Carolina Power & Light Co.;
LLC: No;
Licensed to own: North Carolina Eastern Municipal Power Agency;
LLC: No.
13;
Plant: Byron Station 1;
Licensed to own: Exelon Generation Company, LLC;
LLC: Yes;
License transfer date: 1/12/2001;
LLC parent company: Exelon Corporation.
14;
Plant: Byron Station 2;
Licensed to own: Exelon Generation Company, LLC;
LLC: Yes;
License transfer date: 1/12/2001;
LLC parent company: Exelon Corporation.
15;
Plant: Callaway Plant;
Licensed to own: Union Electric Company;
LLC: No.
16;
Plant: Calvert Cliffs Nuclear Power Plant 1;
Licensed to own: Calvert Cliffs Nuclear Power Plant, LLC;
LLC: Yes;
License transfer date: 6/19/2001;
LLC parent company: Constellation Energy Group, Inc..
17;
Plant: Calvert Cliffs Nuclear Power Plant 2;
Licensed to own: Calvert Cliffs Nuclear Power Plant, LLC;
LLC: Yes;
License transfer date: 6/19/2001;
LLC parent company: Constellation Energy Group, Inc..
18;
Plant: Catawba Nuclear Station 1;
Licensed to own: North Carolina Electric Membership Corp.;
LLC: No;
Licensed to own: Saluda River Electric Cooperative, Inc.;
LLC: No;
Licensed to own: Duke Energy Corporation;
LLC: No.
19;
Plant: Catawba Nuclear Station 2;
Licensed to own: North Carolina Municipal Power Agency No. 1;
LLC: No;
Licensed to own: Piedmont Municipal Power Agency;
LLC: No.
20;
Plant: Clinton Power Station;
Licensed to own: AmerGen Energy Company, LLC;
LLC: Yes;
License transfer date: 11/24/1999;
LLC parent company: Exelon Corporation.
21;
Plant: Columbia Generation Station;
Licensed to own: Energy Northwest;
LLC: No.
22;
Plant: Comanche Peak Steam Electric Station 1;
Licensed to own: TXU Generation Company LP;
LLC: No.
23;
Plant: Comanche Peak Steam Electric Station 2;
Licensed to own: TXU Generation Company LP;
LLC: No.
24;
Plant: Cook (Donald C.) Nuclear Power Plant 1;
Licensed to own: Indiana Michigan Power Company;
LLC: No.
25;
Plant: Cook (Donald C.) Nuclear Power Plant 2;
Licensed to own: Indiana Michigan Power Company;
LLC: No.
26;
Plant: Cooper Nuclear Station;
Licensed to own: Nebraska Public Power District;
LLC: No.
27;
Plant: Crystal River Nuclear Plant 3;
Licensed to own: Florida Power Corporation;
LLC: No;
Licensed to own: City of Alachua;
LLC: No;
Licensed to own: City of Bushnell;
LLC: No;
Licensed to own: City of Gainesville;
LLC: No;
Licensed to own: City of Kissimmee;
LLC: No;
Licensed to own: City of Leesburg;
LLC: No;
Licensed to own: City of New Smyrna Beach and Utilities Commission;
LLC: No;
Licensed to own: City of Ocala;
LLC: No;
Licensed to own: Orlando Utilities Commission and City of Orlando;
LLC: No;
Licensed to own: Seminole Electric Cooperative, Inc.;
LLC: No.
28;
Plant: Davis-Besse Nuclear Power Station;
Licensed to own: Cleveland Electric Illumination Company;
LLC: No;
Licensed to own: Toledo Edison Company;
LLC: No.
29;
Plant: Diablo Canyon Nuclear Power Plant 1;
Licensed to own: Pacific Gas and Electric Company;
LLC: No.
30;
Plant: Diablo Canyon Nuclear Power Plant 2;
Licensed to own: Pacific Gas and Electric Company;
LLC: No.
31;
Plant: Dresden Nuclear Power Station 2;
Licensed to own: Exelon Generation Company, LLC;
LLC: Yes;
License transfer date: 8/3/2000;
LLC parent company: Exelon Corporation.
32;
Plant: Dresden Nuclear Power Station 3;
Licensed to own: Exelon Generation Company, LLC;
LLC: Yes;
License transfer date: 8/3/2000;
LLC parent company: Exelon Corporation.
33;
Plant: Farley (Joseph M.) Nuclear Plant 1;
Licensed to own: Alabama Power Company;
LLC: No.
34;
Plant: Farley (Joseph M.) Nuclear Plant 2;
Licensed to own: Alabama Power Company;
LLC: No.
35;
Plant: Fermi (Enrico) Atomic Power Plant 2;
Licensed to own: Detroit Edison Company;
LLC: No.
36;
Plant: FitzPatrick (James A.) Nuclear Power Plant;
Licensed to own: Entergy Nuclear FitzPatrick, LLC;
LLC: Yes;
License transfer date: 11/ 21/2000;
LLC parent company: Entergy Corporation.
37;
Plant: Fort Calhoun Station;
Licensed to own: Omaha Public Power District;
LLC: No.
38;
Plant: Ginna (Robert E.) Nuclear Station;
Licensed to own: Rochester Gas and Electric Corporation;
LLC: No.
39;
Plant: Grand Gulf Nuclear Station;
Licensed to own: System Energy Resources, Inc.;
LLC: No;
Licensed to own: South Mississippi Electric Power Assoc.;
LLC: No.
40;
Plant: Harris (Shearon) Nuclear Power Plant;
Licensed to own: Carolina Power & Light Co.;
LLC: No;
Licensed to own: North Carolina Eastern Municipal Power Agency;
LLC: No.
41;
Plant: Hatch (Edwin I.) Nuclear Plant 1;
Licensed to own: Georgia Power Company;
LLC: No;
Licensed to own: Municipal Electric Authority of Georgia;
LLC: No;
Licensed to own: Oglethorpe Power Corporation;
LLC: No;
Licensed to own: City of Dalton, Georgia;
LLC: No.
42;
Plant: Hatch (Edwin I.) Nuclear Plant 2;
Licensed to own: Georgia Power Company;
LLC: No;
Licensed to own: Municipal Electric Authority of Georgia;
LLC: No;
Licensed to own: Oglethorpe Power Corporation;
LLC: No;
Licensed to own: City of Dalton, Georgia;
LLC: No.
43;
Plant: Hope Creek Nuclear Power Station;
Licensed to own: PSEG Nuclear, LLC;
LLC: Yes;
License transfer date: 8/21/2000;
10/18/2001;
LLC parent company: Public Service Enterprise Group, Incorporated.
44;
Plant: Indian Point 2;
Licensed to own: Entergy Nuclear Indian Point 2, LLC;
LLC: Yes;
License transfer date: 9/6/2001;
LLC parent company: Entergy Corporation.
45;
Plant: Indian Point 3;
Licensed to own: Entergy Nuclear Indian Point 3, LLC;
LLC: Yes;
License transfer date: 11/21/2000;
LLC parent company: Entergy Corporation.
46;
Plant: Kewaunee Nuclear Power Plant;
Licensed to own: Wisconsin Public Service Corp.;
LLC: No;
Licensed to own: Wisconsin Power & Light Company;
LLC: No.
47;
Plant: LaSalle County Station 1;
Licensed to own: Exelon Generation Company, LLC;
LLC: Yes;
License transfer date: 1/12/2001;
LLC parent company: Exelon Corporation.
48;
Plant: LaSalle County Station 2;
Licensed to own: Exelon Generation Company, LLC;
LLC: Yes;
License transfer date: 1/12/2001;
LLC parent company: Exelon Corporation.
49;
Plant: Limerick Generating Station 1;
Licensed to own: Exelon Generation Company, LLC;
LLC: Yes;
License transfer date: 1/12/2001;
LLC parent company: Exelon Corporation.
50;
Plant: Limerick Generating Station 2;
Licensed to own: Exelon Generation Company, LLC;
LLC: Yes;
License transfer date: 1/12/2001;
LLC parent company: Exelon Corporation.
51;
Plant: McGuire (William B.) Nuclear Station 1;
Licensed to own: Duke Energy Corporation;
LLC: No.
52;
Plant: McGuire (William B.) Nuclear Station 2;
Licensed to own: Duke Energy Corporation;
LLC: No.
53;
Plant: Millstone Nuclear Power Station 2;
Licensed to own: Dominion Nuclear Connecticut, Inc.;
LLC: No.
54;
Plant: Millstone Nuclear Power Station 3;
Licensed to own: Dominion Nuclear Connecticut, Inc.;
LLC: No;
Licensed to own: Central Vermont Public Service Corporation;
LLC: No;
Licensed to own: Massachusetts Municipal Wholesale Electric Co.;
LLC: No.
55;
Plant: Monticello Nuclear Generating Plant;
Licensed to own: Northern States Power Company;
LLC: No.
56;
Plant: Nine Mile Point Nuclear Station 1;
Licensed to own: Nine Mile Point Nuclear Station, LLC;
LLC: Yes;
License transfer date: 11/7/ 2001;
LLC parent company: Constellation Energy Group.
57;
Plant: Nine Mile Point Nuclear Station 2;
Licensed to own: Nine Mile Point Nuclear Station, LLC;
LLC: Yes;
License transfer date: 11/7/ 2001;
LLC parent company: Constellation Energy Group;
Licensed to own: Long Island Lighting Company;
LLC: No.
58;
Plant: North Anna Power Station 1;
Licensed to own: Virginia Electric and Power Company;
LLC: No;
Licensed to own: Old Dominion Electric Cooperative;
LLC: No.
59;
Plant: North Anna Power Station 2;
Licensed to own: Virginia Electric and Power Company;
LLC: No;
Licensed to own: Old Dominion Electric Cooperative;
LLC: No.
60;
Plant: Oconee Nuclear Station 1;
Licensed to own: Duke Energy Corporation;
LLC: No.
61;
Plant: Oconee Nuclear Station 2;
Licensed to own: Duke Energy Corporation;
LLC: No.
62;
Plant: Oconee Nuclear Station 3;
Licensed to own: Duke Energy Corporation;
LLC: No.
63;
Plant: Oyster Creek Nuclear Power Plant;
Licensed to own: AmerGen Energy Company, LLC;
LLC: Yes;
License transfer date: 8/8/2000;
LLC parent company: Exelon Corporation.
64;
Plant: Palisades Nuclear Plant;
Licensed to own: Consumers Energy Company;
LLC: No.
65;
Plant: Palo Verde Nuclear Generating Station 1;
Licensed to own: Arizona Public Service Company;
LLC: No;
Licensed to own: Salt River Project Agricultural Improvement and Power
District;
LLC: No;
Licensed to own: El Paso Electric Company;
LLC: No;
Licensed to own: Southern California Edison Company;
LLC: No;
Licensed to own: Public Service Company of New Mexico;
LLC: No;
Licensed to own: Los Angeles Dept. of Water and Power;
LLC: No;
Licensed to own: Southern California Public Power Authority;
LLC: No.
66;
Plant: Palo Verde Nuclear Generating Station 2;
Licensed to own: Arizona Public Service Company;
LLC: No;
Licensed to own: Salt River Project Agricultural Improvement and Power
District;
LLC: No;
Licensed to own: El Paso Electric Company;
LLC: No;
Licensed to own: Southern California Edison Company;
LLC: No;
Licensed to own: Public Service Company of New Mexico;
LLC: No;
Licensed to own: Los Angeles Dept. of Water and Power;
LLC: No;
Licensed to own: Southern California Public Power Authority;
LLC: No.
67;
Plant: Palo Verde Nuclear Generating Station 3;
Licensed to own: Arizona Public Service Company;
LLC: No;
Licensed to own: Salt River Project Agricultural Improvement and Power
District;
LLC: No;
Licensed to own: El Paso Electric Company;
LLC: No;
Licensed to own: Southern California Edison Company;
LLC: No;
Licensed to own: Public Service Company of New Mexico;
LLC: No;
Licensed to own: Los Angeles Dept. of Water and Power;
LLC: No;
Licensed to own: Southern California Public Power Authority;
LLC: No.
68;
Plant: Peach Bottom Atomic Power Station 2;
Licensed to own: Exelon Generation Company, LLC;
LLC: Yes;
License transfer date: 1/12/2001;
LLC parent company: Exelon Corporation;
Licensed to own: PSEG Nuclear, LLC;
LLC: Yes.
LLC parent company: Public Service Enterprise Group, Incorporated.
69;
Plant: Peach Bottom Atomic Power Station 3;
Licensed to own: Exelon Generation Company, LLC;
LLC: Yes;
License transfer date: 1/12/2001;
LLC parent company: Exelon Corporation;
Licensed to own: PSEG Nuclear, LLC;
LLC: Yes.
LLC parent company: Public Service Enterprise Group, Incorporated.
70;
Plant: Perry Nuclear Power Plant;
Licensed to own: Ohio Edison Company;
LLC: No;
Licensed to own: Cleveland Electric Company;
LLC: No;
Licensed to own: Toledo Edison Company;
LLC: No.
71;
Plant: Pilgrim Station;
Licensed to own: Entergy Nuclear Generation Co.;
LLC: No.
72;
Plant: Point Beach Nuclear Plant 1;
Licensed to own: Wisconsin Electric Power Company;
LLC: No.
73;
Plant: Point Beach Nuclear Plant 2;
Licensed to own: Wisconsin Electric Power Company;
LLC: No.
74;
Plant: Praire Island Nuclear Plant 1;
Licensed to own: Northern States Power Company;
LLC: No.
75;
Plant: Praire Island Nuclear Plant 2;
Licensed to own: Northern States Power Company;
LLC: No.
76;
Plant: Quad Cities Station 1;
Licensed to own: Exelon Generation Company, LLC;
LLC: Yes;
License transfer date: 8/3/2000;
LLC parent company: Exelon Corporation;
Licensed to own: 77: MidAmerican Energy Company;
LLC: 77: No;
License transfer date: 77: [Empty];
LLC parent company: 77: [Empty].
77;
Plant: Quad Cities Station 2;
Licensed to own: Exelon Generation Company, LLC;
LLC: Yes;
License transfer date: 8/3/2000;
LLC parent company: Exelon Corporation;
Licensed to own: MidAmerican Energy Company;
LLC: No.
78;
Plant: River Bend Station;
Licensed to own: Entergy Gulf States, Inc.;
LLC: No.
79;
Plant: Robinson (H. B.) Plant 2;
Licensed to own: Carolina Power & Light Co.;
LLC: No.
80;
Plant: Salem Nuclear Generating Station 1;
Licensed to own: PSEG Nuclear, LLC;
LLC: Yes;
License transfer date: 8/21/2000;
LLC parent company: Public Service Enterprise Group, Incorporated;
Licensed to own: Exelon Generation Company, LLC;
LLC: Yes;
License transfer date: 1/12/2001;
LLC parent company: Exelon Corporation.
81;
Plant: Salem Nuclear Generating Station 2;
Licensed to own: PSEG Nuclear, LLC;
LLC: Yes;
License transfer date: 8/21/2000;
LLC parent company: Public Service Enterprise Group, Incorporated;
Licensed to own: Exelon Generation Company, LLC;
LLC: Yes;
License transfer date: 1/12/2001;
LLC parent company: Exelon Corporation.
82;
Plant: San Onofre Nuclear Generating Station 2;
Licensed to own: Southern California Edison Company;
LLC: No.
83;
Plant: San Onofre Nuclear Generating Station 3;
Licensed to own: Southern California Edison Company;
LLC: No.
84;
Plant: Seabrook Nuclear Power Station;
Licensed to own: FPL Energy Seabrook, LLC;
LLC: Yes;
License transfer date: 11/1/2002;
LLC parent company: FPL Group, Inc.;
Licensed to own: Massachusetts Municipal Wholesale Electric Co.;
LLC: No;
Licensed to own: Tauton Municipal Lighting Plant;
LLC: No;
Licensed to own: Hudson Light & Power Department;
LLC: No.
85;
Plant: Sequoya Nuclear Plant 1;
Licensed to own: Tennessee Valley Authority;
LLC: No.
86;
Plant: Sequoya Nuclear Plant 2;
Licensed to own: Tennessee Valley Authority;
LLC: No.
87;
Plant: South Texas Project 1;
Licensed to own: Texas Genco, LP;
LLC: No;
Licensed to own: City Public Service Board of San Antonio;
LLC: No;
Licensed to own: Central Power & Light Company;
LLC: No;
Licensed to own: City of Austin, Texas;
LLC: No.
88;
Plant: South Texas Project 2;
Licensed to own: Texas Genco, LP;
LLC: No;
Licensed to own: City Public Service Board of San Antonio;
LLC: No;
Licensed to own: Central Power & Light Company;
LLC: No;
Licensed to own: City of Austin, Texas;
LLC: No.
89;
Plant: St. Lucie Plant 1;
Licensed to own: Florida Power and Light Company;
LLC: No.
90;
Plant: St. Lucie Plant 2;
Licensed to own: Florida Power and Light Company;
LLC: No;
Licensed to own: Florida Municipal Power Agency;
LLC: No;
Licensed to own: Orlando Utilities Commission;
LLC: No.
91;
Plant: Summer (Virgil C.) Nuclear Station;
Licensed to own: South Carolina Electric & Gas Company;
LLC: No;
Licensed to own: South Carolina Public Service Authority;
LLC: No.
92;
Plant: Surry Power Station 1;
Licensed to own: Virginia Electric and Power Company;
LLC: No.
93;
Plant: Surry Power Station 2;
Licensed to own: Virginia Electric and Power Company;
LLC: No.
94;
Plant: Susquehanna Steam Electric Station 1;
Licensed to own: PPL Susquehanna, LLC;
LLC: Yes;
License transfer date: 6/1/2000;
LLC parent company: Pennsylvania Power and Light Company.
95;
Plant: Susquehanna Steam Electric Station 2;
Licensed to own: PPL Susquehanna, LLC;
LLC: Yes;
License transfer date: 6/1/2000;
LLC parent company: Pennsylvania Power and Light Company.
96;
Plant: Three Mile Island Nuclear Station 1;
Licensed to own: AmerGen Energy Company, LLC;
LLC: Yes;
License transfer date: 12/20/ 1999;
LLC parent company: Exelon Corporation.
97;
Plant: Turkey Point Station 3;
Licensed to own: Florida Power and Light Company;
LLC: No.
98;
Plant: Turkey Point Station 4;
Licensed to own: Florida Power and Light Company;
LLC: No.
99;
Plant: Vermont Yankee Nuclear Power Station;
Licensed to own: Entergy Nuclear Vermont Yankee, LLC;
LLC: Yes;
License transfer date: 7/1/2002;
LLC parent company: Entergy Corporation;
Licensed to own: Entergy Nuclear Operations, Inc.;
LLC: No.
100;
Plant: Vogtle (Alvin W.) Nuclear Plant 1;
Licensed to own: Georgia Power Company;
LLC: No;
Licensed to own: Municipal Electric Authority of Georgia;
LLC: No;
Licensed to own: Oglethorpe Power Corporation;
LLC: No;
Licensed to own: City of Dalton, Georgia;
LLC: No.
101;
Plant: Vogtle (Alvin W.) Nuclear Plant 2;
Licensed to own: Georgia Power Company;
LLC: No;
Licensed to own: Municipal Electric Authority of Georgia;
LLC: No;
Licensed to own: Oglethorpe Power Corporation;
LLC: No;
Licensed to own: City of Dalton, Georgia;
LLC: No.
102;
Plant: Waterford Generating Station 3;
Licensed to own: Entergy Operations, Inc.;
LLC: No.
103;
Plant: Watts Bar Nuclear Plant 1;
Licensed to own: Tennessee Valley Authority;
LLC: No.
104;
Plant: Wolf Creek Generating Station;
Licensed to own: Kansas Gas & Electric Company;
LLC: No;
Licensed to own: Kansas City Power & Light Company;
LLC: No;
Licensed to own: Kansas Electric Power Cooperative, Inc.;
LLC: No.
Source: GAO survey of NRC Project Managers.
[End of table]
[End of section]
Appendix II: Comments from the Nuclear Regulatory Commission:
UNITED STATES NUCLEAR REGULATORY COMMISSION:
WASHINGTON, D.C. 20555-0001:
April 29, 2004:
Mr. James E. Wells:
Director, Natural Resources and Environment:
United States General Accounting Office:
441 G Street, N.W.
Washington, DC 20548:
Dear Mr. Wells:
I would like to thank you for the opportunity to review and submit
comments on the May 2004 draft of the General Accounting Office's (GAO)
report entitled "Nuclear Regulation-NBC's Liability Insurance
Requirements for Nuclear Power Plants Owned by Limited Liability
Companies." The U.S. Nuclear Regulatory Commission (NRC) appreciates
the time and effort that you and your staff have taken to review this
topic.
GAO correctly concludes that NRC does not treat limited liability
companies differently than other licensees with respect to the Price-
Anderson's insurance requirements. Like other licensees, limited
liability companies must show proof of both primary and secondary
financial protection. GAO also is correct in noting that NRC is not
aware of any problems caused by limited liability companies owning
nuclear power plants and that NRC currently does not regard limited
liability companies' ownership of nuclear power plants as a concern.
Finally, GAO agrees with NBC's conclusion that all its reactor
licensees have sufficient assets that they are likely to be able to pay
the retrospective premiums. These assets are assured by a number of
different methods that are approved by NRC as GAO discusses in its
report.
The NRC believes that the GAO report accurately reflects the present
insurance system for nuclear power plants. Therefore, we do not have
any comments to provide regarding the draft report.
Sincerely,
Signed by:
William D. Travers:
Executive Director for Operations:
cc: Ilene Pollack, GAO:
(360330):
FOOTNOTES
[1] Although 104 commercial nuclear power plants are licensed to
operate in the United States, 1 plant, Browns Ferry Unit 1, was shut
down in 1985 and remains idle.
[2] NRC's regulations define a nuclear incident as any occurrence that
causes bodily injury, sickness, disease, or death or loss of or damage
to property or for loss of the use of property arising out of or
resulting from the radioactive, toxic, explosive, or other hazardous
properties of the source, special nuclear or byproduct material.
[3] NRC regulations also require licensees to maintain $1 billion in
on-site property damage insurance to provide funds to deal with cleanup
of the reactor site after an accident.
[4] The average annual premium for a single nuclear power plant at a
site is about $400,000. The premium for a second or third plant at the
same site is discounted because the maximum amount of primary insurance
for a multi-plant site is $300 million.
[5] Fifteen licensees continue to provide financial statements to NRC.
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