Nuclear Science:

Effect of Conversion of Washington Nuclear Plant No. 1 on Debt and Electric Rates

RCED-89-88FS: Published: Mar 9, 1989. Publicly Released: Apr 12, 1989.

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Pursuant to a congressional request, GAO reviewed the Department of Energy's (DOE) acquisition and conversion of a commercial nuclear power plant to a nuclear materials production facility.

GAO noted that the Bonneville Power Administration (BPA) agreed as part of a net billing agreement to pay the total annual maintenance costs of the power plant, including principal and interest on bonded debt, in exchange for the right to the plant's electric power. GAO found that: (1) DOE acquisition of the commercial nuclear power plant for less than the amount of the outstanding bonds could lead to default; (2) condemnation would be considered a transfer of the reactor through operation of law; (3) a condemnation price would be used to equal the amount of bonded debt; (4) BPA would remain liable for outstanding bond costs and other costs associated with the nuclear power plant; and (5) the cost of electricity from the converted reactor would be lower than the cost of producing electricity from a coal-fired power plant.

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