B-133778, NOV. 14, 1957

B-133778: Nov 14, 1957

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UNITED STATES ATOMIC ENERGY COMMISSION: REFERENCE IS MADE TO THE GENERAL MANAGER'S LETTER OF SEPTEMBER 12. THE QUESTION WHICH HAS ARISEN AS TO THE COMMISSION'S AUTHORITY TO ENTER INTO CONTRACTUAL ARRANGEMENTS OF THIS NATURE RESULTS FROM THE FACT THAT PAYMENTS FOR POST-CONSTRUCTION RESEARCH ARE TO BE MADE BY THE COMMISSION OVER A PERIOD OF YEARS IN THE FUTURE. WHILE THE PROGRAM JUSTIFICATION DATA SUBMITTED IN CONNECTION WITH THIRD ROUND PROPOSALS WAS NOT GIVEN IN AS MUCH DETAIL AS THAT FOR ROUNDS ONE AND TWO. NO QUESTION WAS RAISED BEFORE COMMITTEES OR ON THE FLOOR OF THE HOUSE OR SENATE AS TO THE COMMISSION'S AUTHORITY TO MAKE CONTRACTS COVERING A FIVE-YEAR OPERATING PERIOD. THE NORTHERN STATES PROPOSAL WAS SUBMITTED TO THE JOINT COMMITTEE SHORTLY AFTER THE DATE OF THE GENERAL MANAGER'S LETTER.

B-133778, NOV. 14, 1957

TO HONORABLE LEWIS L. STRAUSS, CHAIRMAN, UNITED STATES ATOMIC ENERGY COMMISSION:

REFERENCE IS MADE TO THE GENERAL MANAGER'S LETTER OF SEPTEMBER 12, 1957, REQUESTING TO BE ADVISED WHETHER THE COMMISSION HAS AUTHORITY IN CONNECTION WITH ITS PROPOSED THIRD ROUND POWER DEMONSTRATION PROGRAM CONTRACT WITH NORTHERN STATES POWER COMPANY, TO OBLIGATE THE UNITED STATES TO MAKE CERTAIN PAYMENTS TO NORTHERN STATES FOR RESEARCH AND DEVELOPMENT DURING THE PERIOD AFTER CONSTRUCTION OF THE PROJECT.

UNDER THE PROPOSED CONTRACT, NORTHERN STATES WOULD DESIGN AND CONSTRUCT A NUCLEAR POWER PLANT WITH AN ADVANCED TYPE OF BOILING WATER REACTOR, TO GENERATE ABOUT 66,000 KILOWATTS OF ELECTRICITY, AT A TOTAL ESTIMATED COST OF $27,100,000. OF THIS AEC WOULD CONTRIBUTE A MAXIMUM OF $5,500,000 TOWARD PRE-CONSTRUCTION RESEARCH AND DEVELOPMENT, AND, IN ADDITION, WOULD WAIVE ITS FUEL USE CHARGES FOR FIVE YEARS' OPERATION AND PAY UP TO $500,000 FOR POST-CONSTRUCTION RESEARCH AND DEVELOPMENT. THE POST- CONSTRUCTION PAYMENTS WOULD BE LIMITED TO SPECIFIC RESEARCH AND EXPERIMENTAL PROGRAMS TO BE DEFINED IN THE CONTRACT, SUCH AS ANALYSIS OF SPENT FUEL ELEMENTS AND DEVELOPMENT OF IMPROVED REACTOR COMPONENTS, AND WOULD NOT BE USED IN ANY WAY FOR REACTOR OPERATING COSTS.

THE QUESTION WHICH HAS ARISEN AS TO THE COMMISSION'S AUTHORITY TO ENTER INTO CONTRACTUAL ARRANGEMENTS OF THIS NATURE RESULTS FROM THE FACT THAT PAYMENTS FOR POST-CONSTRUCTION RESEARCH ARE TO BE MADE BY THE COMMISSION OVER A PERIOD OF YEARS IN THE FUTURE, AND MIGHT THEREFORE BE CONSIDERED TO VIOLATE STATUTORY RESTRICTIONS SUCH AS SECTION 712A, TITLE 31, U.S. CODE, WHICH LIMIT THE USE OF ANNUAL APPROPRIATIONS TO THE NEEDS OF THAT YEAR. SOMEWHAT SIMILAR QUESTION AROSE IN CONNECTION WITH THE FIRST ROUND CONTRACT BETWEEN THE COMMISSION AND CONSUMERS PUBLIC POWER DISTRICT OF NEBRASKA, AND WE ADVISED YOU BY LETTER, B-133750, DATED SEPTEMBER 19, 1957, THAT THE LEGISLATIVE HISTORY OF THE AUTHORIZATION AND APPROPRIATION ACTS COVERING THE POWER DEMONSTRATION REACTOR PROGRAM FOR THE FISCAL YEAR 1958 SHOWED CONGRESSIONAL APPROVAL OF THE PROPOSED CONTRACTUAL ARRANGEMENTS WITH CONSUMERS.

WHILE THE PROGRAM JUSTIFICATION DATA SUBMITTED IN CONNECTION WITH THIRD ROUND PROPOSALS WAS NOT GIVEN IN AS MUCH DETAIL AS THAT FOR ROUNDS ONE AND TWO, THE LEGISLATIVE HISTORIES OF BOTH THE AUTHORIZATION AND APPROPRIATION BILLS CONTAIN REFERENCES TO THE NORTHERN STATES PROPOSAL AND TO THE FACT THAT THIRD ROUND CONTRACTS WOULD PROVIDE FOR POST-CONSTRUCTION PAYMENTS IN FUTURE YEARS. SEE, FOR EXAMPLE, PAGES 20 AND 60 OF HOUSE REPORT NO. 978, 85TH CONGRESS. NO QUESTION WAS RAISED BEFORE COMMITTEES OR ON THE FLOOR OF THE HOUSE OR SENATE AS TO THE COMMISSION'S AUTHORITY TO MAKE CONTRACTS COVERING A FIVE-YEAR OPERATING PERIOD.

THE AUTHORIZATION BILL AS ENACTED INCLUDED AN AMOUNT OF $30,000,000 TO COVER PROPOSALS UNDER THE THIRD ROUND, AND THE APPROPRIATION BILL, AFTER AMENDMENT, ALSO INCLUDED THIS AMOUNT FOR THIS PURPOSE. THE DEBATE IN THE HOUSE ON THIS $30,000,000 ITEM OF APPROPRIATION INDICATES AN INTENT TO MAKE THE MONEY AVAILABLE FOR SUCH THIRD ROUND PROPOSALS AS SHOULD THEREAFTER BE APPROVED BY THE COMMISSION AND SUBMITTED TO THE JOINT COMMITTEE ON ATOMIC ENERGY PURSUANT TO SECTION 111 (B) OF THE AUTHORIZATION ACT. SEE PP. 14163-66, CONGRESSIONAL RECORD, AUGUST 21, 1957. THE NORTHERN STATES PROPOSAL WAS SUBMITTED TO THE JOINT COMMITTEE SHORTLY AFTER THE DATE OF THE GENERAL MANAGER'S LETTER, AND ON SEPTEMBER 19, 1957, THAT COMMITTEE SIGNIFIED ITS APPROVAL OF THE PROPOSED ARRANGEMENTS BY WAIVING THE 45-DAY WAITING PERIOD OTHERWISE REQUIRED BY SECTION 111 (B) OF THE AUTHORIZATION ACT.

IN VIEW OF THE FOREGOING, THE PROPOSED CONTRACTUAL ARRANGEMENT WITH NORTHERN STATES TO PAY FOR THE COSTS OF POST-CONSTRUCTION RESEARCH AND DEVELOPMENT IS BELIEVED TO BE WITHIN THE AUTHORITY OF THE COMMISSION, AND WE WILL NOT OBJECT THERETO.