Proposed Insurance for Operating Nuclear Reactors

B-204678: Published: Feb 3, 1982. Publicly Released: Jun 4, 1985.

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GAO comments were requested on proposed revisions to legislation addressing the problems of the underinsured status of the nuclear utility industry and the need to secure funds to complete the cleanup at the damaged Three Mile Island nuclear reactor. The revised bill responds to some concerns expressed in a GAO report. GAO commends the proposed legislation's continued emphasis on reducing the financial threat of a major accident to an electric utility company using nuclear power. Adequate insurance coverage should be made available to the utility industry as soon as practicable. GAO also supports the provisions of the proposed legislation that places the initial responsibility for providing the insurance coverage on the private sector. Because of the utility industry's present commitment to provide for cleanup costs and its request that some form of legislative requirement for utility company participation be enacted to facilitate that contribution, GAO believes that a joint supplemental insurance and cleanup funding plan might present a workable solution to that request. GAO believes that certain inconsistencies and omissions should be addressed. Although the supplemental insurance requirement provides decontamination and maintenance coverage to help ensure that public health and safety is protected in the event of a nuclear accident, it does not cover rehabilitation activities. The bill should include provisions for contingency procedures to be followed by the Nuclear Regulatory Commission (NRC) if it is unsuccessful in obtaining acceptable bidders to be considered for certification as the approved insurance concern. The bill should also clearly establish NRC authorities and responsibilities with respect to the certified insurance concern and should define the payback provision for insurance payments made for accidents incurred before December 31, 1983.

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