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116558 1 (1981-09-22)

handle is hein.gao/gaobadyvp0001 and id is 1 raw text is: UNITED STATES GENERAL ACCOUNTING OFFICE WASHINGTON, D.C. FOR RELEASE ON DELIVERY EXPECTED AT 10:00 A.M. SEPTEMBER 22, 1981 STATEMENT OF J. DEXTER PEACH DIRECTOR, ENERGY AND MINERALS DIVISION BEFORE THE 165 SUBCOMMITTEE ON ENERGY CONSERVATION 116558 AND POWER U.S. HOUSE OF REPRESENTATIVES H.R. 2512 encompasses two critical issues stemming from the TMI-2 accident- increased insurance coverage and cleanup funding-both of which need immediate resolution. Passage of H.R. 2512 is premature and requires establishing an organ- ization that is not needed. The current proposals to increase insurance coverage to $1 billion and Gov. Thornburgh's proposal for funding the cleanup need to be given an opportunity to be developed. Total costs to clean up TMI-2 are estimated at $1.034 billion, with an estimated $570 million unfunded balance expected at the end of 1981. Additional O&M costs of $105 million will also be incurred but this is a matter for State regulators and GPU to settle. DOE is proposing an extensive multi-year R&D effort at TMI-2. We believe this is a worthwhile program, will greatly benefit both the Federal regulatory agencies and the utility industry, and should be accorded full Congressional support. GPU customers have not been charged with any of the cleanup costs to date. 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. If accident recovery costs of $150 million/ year were placed on ratepayers, Met Ed's rates would increase about 1.0 cent/kWh or 15.5 percent more than 1980 rate levels. Rates for Penelec and Jersey Central customers would go up about 0.3 cent/kWh or 6.0 and 3.8 percent, respectively, over 1980 rates. With few exceptions, all accident cleanup costs to date have been paid from insurance proceeds. No entity other than GPU shareholders has provided any direct financial assistance. Indirect costs to Federal agencies as a result of the accident, however, will total about $275 million by the end of 1981. We found no reason why the reactor core should not be removed as expedi- tiously as possible. While posing no immediate safety hazard, the current status of the reactor has the elements for additional safety problems. For economic reasons, early core removal would be advantageous to both GPU and its customers. The single most important step to adequately finance any future accident re- covery effort is to increase the present level of property insurance coverage. While it appears the private sector will be able to achieve this, the responsi- bility for determining adequate levels of coverage and the best way to do it rests with NRC. 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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