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Reactor Sales Are Said to Endanger Accident Payments
Index:
Reactor Sales Are Said to Endanger Accident Payments
US Court Affirms Plutonium Shipments
N.Korea Marks Nuclear Reactor Phase
SCE&G Files License Extension Application for the V.C. Summer
======================================
Reactor Sales Are Said to Endanger Accident Payments
WASHINGTON, Aug. 6 (NY Times) The sale of about two dozen nuclear
power reactors around the country to a small number of companies has
undermined the system Congress devised to ensure compensation for
people hurt by a severe nuclear accident, according to an analysis
commissioned by two antinuclear groups in New York.
Federal law requires reactor operators to buy $200 million in
conventional insurance. It also provides for about $9.3 billion in
additional coverage by requiring that after an accident, each plant
pay $10 million a year, up to $88 million, to compensate victims.
When the law, known as the Price-Anderson act, was approved by
Congress, the idea was to spread the risk among all reactors. But as
a result of recent mergers and purchases, four companies now own so
many reactors that their liabilities would be more than half a
billion dollars each in case of accidents.
The study, which was commissioned by Riverkeeper, a Hudson River
environmental group, and the STAR Foundation, a Long Island
antinuclear group, points out that in many cases, the companies
bought the reactors through limited liability subsidiaries that could
declare bankruptcy and permit the parent corporations to walk away
unscathed. It also says that the limited liability structure
jeopardizes the money set aside for decommissioning the reactors at
the end of their lives.
"Price-Anderson only works if those companies are reachable in the
event of an accident," said Alex Matthiessen, executive director of
Riverkeeper. "These limited liability structures seem specifically
designed to put them beyond reach."
The report, prepared by Synapse Energy Economics and scheduled to be
officially released on Wednesday by being posted on the World Wide
Web at www.noradiation.org, details layer upon layer of corporate
structures used in recent reactor purchases. Robert Alvarez, program
director for the Star Foundation, said that most of the holding
companies had no employees and were merely "shell corporations." He
called them " Enron-style subsidiaries."
Representatives for the nuclear industry scoffed at the idea that the
changes in ownership threatened the insurance system. Having nuclear
plants concentrated in the hands of companies that specialize in
running reactors has safety benefits, they said, and may also create
greater financial responsiveness.
"If I'm a nuclear operator, I'm not going to undermine my core
business to save $10 million a year," said Marvin S. Fertel, senior
vice president at the Nuclear Energy Institute, a trade group.
Failure to pay the fee for one reactor could jeopardize the licenses
of the others, he said.
A typical 1,000-megawatt nuclear plant has fuel and operating
expenses of $130 million to $140 million a year, he said, and a $10
million payment on top of that, in the unlikely event of a major
accident, was a small increment.
In an introduction to the report, Peter A. Bradford, a former member
of the Nuclear Regulatory Commission and a former head of the public
service commissions in both New York State and Vermont, agreed that
the consolidation of nuclear ownership might make for safer
operation. But he said he thought it also "risks the shifting of
accident and decommissioning costs from the plant owners to the
general public because the relatively secure financial backing of
substantial utilities companies has, in many cases, been replaced by
a limited liability subsidiary whose only asset is an individual
nuclear power plant."
Price-Anderson, established in 1957 by Congress, expired on Aug. 1.
Provisions remain in force for existing reactors but new ones would
not be covered. But that point is moot, since no new reactors have
been ordered since 1978.
The insurance system established by the law could be crucial for
people who live within a few miles of nuclear plants because
commercial property insurance does not cover radiation accidents.
In creating the program, Congress set a cap on how much would be paid
to any victims of a nuclear accident. The cap is periodically
adjusted for inflation; it is now about $9.5 billion, with the money
coming from the $200 million in conventional insurance and the $9.3
billion that would be paid by the nuclear industry after an accident.
Opponents say the cap is a subsidy to the nuclear industry; the
industry asserts that the $9.5 billion is far more than would be
available for a catastrophe at a chemical plant or some other
industrial site. So far, they point out, payments have totaled only
about $200 million.
Whatever the merits of the arguments on both sides, the emerging
structure of the industry has clearly changed the underlying
assumptions behind the building of nuclear power plants. Critics
agree that having a single company operate 15 or 20 reactors is
probably good for safety, since plants within a company share
expertise more readily than plants owned by scattered utilities.
But they also say that the new owners may lack the deep pockets of
the mammoth regulated utilities that built the reactors, making an
insurance scheme more necessary.
The new legal structure is radically different from what came before.
For example, the Indian Point reactors, in a suburb of New York City
along the Hudson River, were sold by Consolidated Edison and the New
York Power Authority to Entergy, a utility that built five of its own
plants and has bought six more.
A spokesman for Entergy, Carl Crawford, said the structure had tax
advantages. Asked if it also created a liability shield, he said, "It
has that effect, too."
But, he said, "anyone who thinks that a company that would spend a
billion and a half of its own dollars is going to shirk a $10 million
a year insurance payment, that's just not reasonable."
-----------------
US Court Affirms Plutonium Shipments
COLUMBIA, S.C. (AP) - South Carolina Gov. Jim Hodges says he plans to
appeal a court ruling rejecting his request to stop the federal
government from shipping surplus plutonium into the state.
``The weapons-grade plutonium is a threat to the health and safety of
our state,'' Hodges said after Tuesday's decision by the Fourth
Circuit U.S. Court of Appeals. ``Our final hope lies with the Supreme
Court.''
Hodges has fought with the Department of Energy over the shipments
for more than a year. He once vowed to use state troopers to turn
back the shipments at the border unless he was given legally
enforceable assurances that his state would not permanently house the
waste.
The Energy Department is moving six tons of plutonium from Rocky
Flats, a former weapons plant near Denver, to the Savannah River Site
near the Georgia line. The department plans to eventually convert the
material into commercial nuclear fuel.
The appeals court rejected Hodges' contentions that federal officials
needed more environmental studies and failed to fully consider the
risks of long-term storage.
The appeals court upheld a lower court decision allowing the
shipments. Hodges was rebuked by a federal judge when he tried to ban
shipments from the state after the earlier ruling.
On Friday, Energy Department officials told Sen. Wayne Allard, R-
Colo., that the department had begun shipping the plutonium from
Colorado to the site near Aiken, said Allard's spokesman Sean Conway.
DOE spokesman Joe Davis would not confirm the status of the
shipments.
-----------------
N.Korea Marks Nuclear Reactor Phase
KUMHO, North Korea (AP) - Amid fireworks and applause, North Korean
officials and representatives of a U.S. government-led consortium
marked a new phase in the construction of two nuclear reactors on
Wednesday. But a senior U.S. official said the North wasn't complying
with the deal's terms.
Under a U.S.-North Korean agreement in 1994, the consortium was to
build reactors to meet the communist country's desperate need for
power. In exchange, the North said it would freeze its suspected
nuclear weapons program and allow international scrutiny.
The so-called Agreed Framework averted the threat of war on the
Korean peninsula, but North Korea has yet to open its facilities to
inspections by the U.N. International Atomic Energy Agency.
North Korea ``must start meaningful cooperation now with the IAEA and
must comply with all of its obligations under the Agreed Framework,''
said Jack Pritchard, a U.S. State Department official.
The CIA suspects the North might have stockpiled enough plutonium to
make one or two atomic bombs. North Korea denies it.
Pritchard said the North's failure to allow inspections, which would
take three to four years to complete, could undermine the $4.6
billion project. Political tension and funding problems have delayed
the project by several years, prompting harsh criticism from North
Korea.
Pritchard spoke at a concrete-pouring ceremony at the reactor site in
Kumho, a remote coastal region near the border with Russia's
Far East. Attending were 100 government representatives from the
United States, Japan, South Korea and the European Union, all
members of the consortium.
Workers clapped and fireworks crackled. North Korean officials did
not make any speeches.
Surrounded by low mountains, the area has been leveled to allow
construction. It is isolated from the nearest city, Sinpo, which has
100,000 residents. Some 1,400 workers - 700 South Koreans, 600 Uzbeks
and 100 North Koreans - are working at the site.
A North Korean official who identified himself only by his surname,
Ko, said less than 15 percent of the project had been completed.
``All North Koreans in the area want to see the plant move ahead very
quickly,'' he said.
The ceremony came amid signs of a thaw in North Korea's tense
relations with South Korea, the United States and Japan. Cabinet-
level talks between North and South Korea are scheduled for next week
in Seoul.
In 1993, North Korea withdrew from the Nuclear Non-Proliferation
Treaty. It reversed the decision the next year and froze its nuclear
program in exchange for the two Western-developed, light-water
reactors.
The consortium, known as the Korean Peninsula Energy Development
Organization, originally promised to build the two reactors by
2003. North Korea was required to allow inspections of its homemade
nuclear facilities before key components of the first reactor are
delivered.
The consortium wants to deliver its first key component - the reactor
vessel - in 2005.
Pritchard said it made no sense to complete a significant portion of
the first reactor and then wait for years until North Korea allows
inspections of its nuclear facilities.
Visitors to North Korea report that many factories operate at less
than 30 percent of their capacity mainly because of a lack of
electricity. The country also relies on outside food aid.
-----------------
SCE&G Files License Extension Application for the V.C. Summer Nuclear
Station
COLUMBIA, S.C., Aug. 6 /PRNewswire-FirstCall/ -- South Carolina
Electric & Gas Company, principal subsidiary of SCANA
Corporation (NYSE:SCG), today filed a formal application with the
Nuclear Regulatory Commission for a 20-year license extension
for its V.C. Summer Nuclear Station.
Summer Station's current license runs through August 6, 2022 and the
extension, if approved, would allow the plant to operate
through 2042.
"Several of this country's nuclear plants have already received
license extensions, and we believe Summer Station's excellent
operating and safety records make it an ideal candidate to have its
operating life extended as well," said Senior Vice President of
Nuclear Operations Steve Byrne.
SCE&G is engaged in the generation, transmission, distribution and
sale of electricity to over 550,000 customers in 24 counties in
central, southern and southwestern South Carolina. The company also
provides natural gas service to approximately 270,000
customers in 33 counties in the state.
SCANA Corporation, a Fortune 500 company headquartered in Columbia,
SC, is an energy-based holding company principally engaged, through
subsidiaries, in electric and natural gas utility operations,
telecommunications and other energy-related businesses. The Company
serves more than 550,000 electric customers in South Carolina and
approximately one million natural gas customers in South Carolina,
North Carolina and Georgia. Information about SCANA and its
businesses is available on the Company's website at www.scana.com.
-------------------------------------------------
Sandy Perle
Director, Technical
ICN Worldwide Dosimetry Service
ICN Plaza, 3300 Hyland Avenue
Costa Mesa, CA 92626
Tel:(714) 545-0100 / (800) 548-5100 Extension 2306
Fax:(714) 668-3149
E-Mail: sandyfl@earthlink.net
E-Mail: sperle@icnpharm.com
Personal Website: http://sandy-travels.com/
ICN Worldwide Dosimetry Website: http://www.dosimetry.com/
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