APPENDIX 7 Mr. ROBERT E. HOLLINGSWORTH, General Manager, U.S. Atomic Energy Commission, JOINT COMMITTEE ON ATOMIC ENERGY, U.S. CONGRESS, Washington, D.O., February 20, 1973. DEAR MR. HOLLINGSWORTH: Confirming our earlier conversation, enclosed is a copy of a Committee press release announcing plans to hold hearings on the revised proposed agreement for proceeding with the Liquid Metal Fast Breeder Reactor Demonstration Plan. It would be appreciated if the Commission would make arrangements for the participants, including the Westinghouse Electric Corporation, to be present and prepared to testify at the hearing. Sincerely yours, EDWARD J. BAUSER, Enclosure: Press Release, As Stated (291) In our letter of January 30, 1973, you were advised that in accordance This is to further advise you that we have this date submitted an amendment to the proposed legislation which would add to the previously submitted proposed legislation the new subsection (c) specified in the enclosure to this letter. In effect, the proposed revision would amend Sec. 106 of P.L. 91-273, as amended by P.L. 92-84, which authorizes the Atomic Energy Commission to enter into a cooperative arrangement for the development, design, construction and operation of a Liquid Metal Fast Breeder Reactor Demonstration Plant. In implementation of this authorization, a proposed contract has been negotiated among AEC, Tennessee Valley Authority, Commonwealth Edison Company and Project Management Corporation, the corporation, organized and existing under the District of Columbia Nonprofit Corporation Act, which will manage the project. Copies of the proposed contract were transmitted to the Joint Committee on Atomic Energy on January 26, 1973, accompanied by a revised basis of arrangement for this project submitted to the Joint Committee on Atomic Energy pursuant to the requirements of Sec. 6 of P.L. 91-273, as amended by P.L. 92-84. Enactment of the presently proposed amendment would enable AEC to implement four features of the proposed contract described in the bill analysis enclosed herewith. The amendment is applicable solely to the single Liquid Metal Fast Breeder Reactor Demonstration project presently authorized. (ENCLOSURE 1) U. S. Atomic Energy Commission Proposed FY 1974 Authorization Bill It is proposed that the following new subsection (c) be added to Sec. 105 of the proposed legislation submitted to the Congress by the AEC with its letter of January 30, 1973: "(c) Section 106 of Public Law 91-273, as amended, is further amended by adding thereto the following new subsection (c): '(c) The Commission is hereby further authorized to agree, by modification to the definitive cooperative arrangement reflecting such changes therein as it deems appropriate for such purpose, to the following: (1) To assign two of its officials or employees to serve on the board of directors of the non-profit corporation which will manage the demonstration project pursuant to said arrangeand, further, to assign not more than five of its employees to serve as personnel of said corporation, said agreement to be on basis that all of such service, in the case of each of such assigned individuals, will constitute proper discharge of duties performed for, and within the scope of the individual's regular office or employment with, ment, the Commission; (2) to execute and deliver to the other parties to the AEC definitive contract, without regard to . the provisions of section 3679 of the Revised Statutes, as 20-233 0-73- -20 amended, the special undertakings of indemnification specified in said contract; (3) to accept ownership and custody of the property constituting the Liquid Metal Fast Breeder Reactor powerplant or parts thereof, and to use, decommission, and dispose of said property, without regard to the provisions of section 3679 of the Revised Statutes, as amended, and as provided for in the AEC definitive contract; and (4) to submit to arbitration any factual issue as to whether one or more of the criteria stipulated in the AEC definitive contract as bases for termination of the demonstration project have been met.'" (ENCLOSURE 2) U. S. Atomic Energy Commission Subdivision (1) of the proposed new subdivision (c) to Sec. 105 would enable AEC to participate in the joint management of design, construction and operation of the Liquid Metal Fast Breeder Reactor (LMFBR) demonstration plant which has been authorized as a Government-utilityindustry cooperative arrangement by P.L. 91-273 as amended by P.L. 92-84. It would permit two AEC officials or employees to serve on a seven man board of directors of the Project Management Corporation (PMC) which has been authorized to manage the project on behalf of its sponsors, AEC, Tennessee Valley Authority (TVA), Commonwealth Edison Corporation (CE), and Breeder Reactor Corporation (BRC). Membership of the PMC board would consist of two directors each representing AEC, TVA, and CE, and one representing BRC which is the organization through which the electric utilities of the nation are channeling some $250,000,000 into the demonstration plant project. When AEC obtains the requested authority the articles of incorporation and bylaws of PMC and the contract among AEC, TVA, CE and PMC would be appropriately changed. The authority to permit up to five AEC employees to serve in any capacity on the PMC staff, would enable AEC to directly assist with staffing of PMC through the loan of AEC staff members possessing needed talents and experience but who wish to remain as career employees with AEC. The assigned individuals will remain on AEC's payroll throughout periods of assignment, and will not receive any payment or compensation from PMC, and their services pursuant to this amendment will, for all purposes as between the AEC and the assigned individuals, be regarded as official services for the AEC. Subdivisions (2) and (3) are required under the terms of the proposed definitive cooperative arrangement in order that the project may proceed into the construction and operational phases. The proposed AEC contract specifies that construction of the plant cannot begin unless the two features referred to in these subdivisions are contractually in effect. The indemnity protection to the other parties to the AEC definitive contract, which subdivision (2) would enable, would effectuate the intention of the parties that project costs and expenses be borne by AEC, except to the extent otherwise specifically indicated in the contract. Subdivision (3) would provide AEC with the necessary legislative authority to take over the Liquid Metal Fast Breeder Reactor powerplant, or parts thereof as the case may be, and to use and dispose of said property, as provided for in the AEC definitive contract; this would occur in the event the Tennessee Valley Authority does not decide to retain ownership of the facility, or in the event of an early termination of the project, as provided for in the contract. The undertakings in subdivisions (2) |