This particular site where this project will be located was acquired by the State for waste storage purposes. Under this agreement it will serve that purpose. I think the presence of a substantial industry such as this on it will make it more feasible and more economic as a waste storage center. WASTE DISPOSAL Representative PRICE. Why have you not yet submitted your charges for perpetual waste care? Mr. TOWNSEND. We have provided our charges to Nuclear Fuel Services, Inc., and they, in turn, have provided these to the Atomic Energy Commission. I think what is going on right now is that the Commission has asked the company to translate these into terms that relate to the reprocessing charge. It is my understanding that the company is doing this. We have established our charges, and they will be the basis of their calculations. Representative PRICE. If these charges are not adequate for providing for perpetual care, what provisions have been made for obtaining additional funds? Mr. TOWNSEND. The Atomic Energy Commission has been much interested in obtaining assurances from the States that if the State takes on this responsibility it will assume the responsibility in all of its ramifications. These assurances have been provided to the Atomic Energy Commission. The State is taking on this obligation. It is establishing charges as closely calculated as we and the consultants who have been available to us can make them to cover these costs based on the technology as it exists today. Representative PRICE. Will the revenue collected in connection with the waste care by the Authority from NFS be deposited in a special trust fund which would not be subject to disbursement other than to provide for perpetual care of wastes generated by the reprocessing operation? Mr. TOWNSEND. Yes; it will be in a special fund. This is provided for under the statute. We expect that we will also, after the project commences I mean during its construction in the interim period prior to its operation-suggest to the Governor that he appoint a board of trustees for this fund, who will preside over it and who will isolate it from all other funds. Representative PRICE. Additions to the liquid waste storage facilities might have to be substantially expanded. What guarantee is there that the Authority can obtain sufficient funds to provide for these additions if they are needed? Mr. TOWNSEND. The charges are established on the basis of the experience to date, which in the case of some of these facilities is getting to be on the order of 20 years. The funds are calculatedand the spare to storage ratio of the installation is calculated-to cover this contingency. There will be spares there. If there is a leak, certainly the first thing you do is to use the spare. Then you utilize the funds that you have accumulated for this type of contingency to build an additional spare or other additional spares as required. We believe that the funds are adequate to provide for this. As I said before, the State of New York has made representations to the Commission which are satisfactory to the Commission that it is standing behind this obligation. Representative PRICE. You have to anticipate improvement and modification of this plant year by year, perhaps on an annual basis. Who provides the funds for such improvements or modifications? Mr. TOWNSEND. You are talking about the waste storage facilities or reprocessing facility? Representative PRICE. I am talking about the waste storage facili ties. Mr. TOWNSEND. As additional facilities are required, it is provided in our arrangements with the company that the company may, if it wishes, provide these additional facilities and dedicate them to the Authority. The Authority has offered on 2 years' notice to proceed to provide additional facilities with its own resources. Representative PRICE. Thank you very much, Mr. Townsend. (Whereupon, at 4:20 p.m., Tuesday, May 14, 1963, the committee recessed subject to call.) APPENDIXES APPENDIX 1 MATERIAL FURNISHED TO THE JOINT COMMITTEE ON ATOMIC ENERGY BY AEC ON INDUSTRIAL CHEMICAL PROCESSING, Hon. GLENN T. SEABORG, Chairman, Atomic Energy Commission, APRIL 30, 1963. DEAR DR. SEABORG: During the executive meeting between the Joint Committee and the Commission on April 26, the question of the proposed contract between the AEC and Nuclear Fuel Services, Inc., was discussed. At that time, the committee requested the Commission to provide a report covering the details of the proposed NFS arrangements. Although these arrangements had been discussed at an earlier informal meeting with the Commission, it was brought out that the committee had not been furnished with detailed information on this project since the Commission's letter of December 3, 1962, which set out in very general terms the tentative plans for the project. To date, the committee has not received the requested information. This letter is to confirm the committee's request for detailed information, which should include the latest draft of the proposed NFS contract. The committee tentatively plans to hold hearings in public session on these arrangements on May 14. It therefore would be appreciated if we could be furnished with the requested documents at the earliest possible date in advance of these hearings. Your cooperation will be appreciated. JOHN O. PASTORE, Chairman. Mr. JOHN T. CONWAY, ATOMIC ENERGY COMMISSION, Executive Director, Joint Committee on Atomic Energy, DEAR MR. CONWAY: In accordance with Senator Pastore's request at his meeting with the Chairman on April 26, we have prepared a report on the Nuclear Fuel Services, Inc. (NFS), proposal to construct a commercial chemical reprocessing facility for irradiated nuclear fuels. Six copies of this report are attached, along with three copies of the latest draft NFS-utility contract that we have received from NFS, and three copies of the latest draft AEC baseload contract with NFS. The report reflects our current understanding of NFS's plans and its agreements with other parties, as obtained from NFS in discussions and contract negotiation meetings. Some changes may, therefore, develop in the course of finalizing these plans and agreements. It is my understanding that further discussions have been held between NFS and its proposed utility customers, which discussions, I am told, will lead to some changes in the draft NFS-utility contract. Furthermore, we understand that the utilities, before signing their contract with NFS, will have the right to review the final AEC baseload contract and, with respect to articles affecting charges, to choose between the provisions incorporated in the utility draft and those of the baseload contract. Accordingly, there may be substantial changes in the utility contracts before they are signed. 103 With respect to the AEC baseload contract, the copy attached represents the most recent draft, but not necessarily the final contract terms. We expect to transmit copies to NFS today for its review; AEC staff review is still being made. We are striving to complete discussions and drafting with NFS at the earliest practicable date; but several areas, such as patents and technical and cost information, are still not completely negotiated. The draft also lacks a statement of charges for perpetual waste care and an article providing for termination for the convenience of the Government. Both of these matters will be covered in the final contract. I will be pleased to provide whatever further information on this subject that the Joint Committee may wish. Sincerely yours, A. R. LUEDECKE, REPORT TO THE JOINT COMMITTEE ON ATOMIC ENERGY ON INDUSTRIAL CHEMICAL PROCESSING INDEX I. Introduction. A. AEC obligation to reprocess irradiated fuels. B. AEC financial settlement based upon "conceptual plant." C. NFS proposal. D. Other possible industry interest. II. Nuclear fuel services' proposal. A. Corporate relationships. B. Source and application of funds. C. Location of project. D. Schedule of the project E. Basic features of project. F. ARDA interest. G. NFS charges to licensees for services. III. AEC relationship to project. A. Government fuel load. B. Scheduling flexibility. C. Possible research and development. D. Deferral of certain facilities. E. AEC does not guarantee success of venture. F. NFS as sole supplier of chemical processing services. IV. Availability of load for NFS plant. A. Assuming no capability for processing sodium bonded or SS cermet fuels. B. Assuming NFS installs capability for processing sodium bonded fuels. C. Assuming NFS installs capability for processing SS cermet fuels. D. Assuming NFS installs capability for processing both sodium bonded and SS cermet fuels. V. Status of NFS negotiations with licensees. A. Contracts with IRG. B. Negotiations with other utilities. VI. Benefits to AEC. A. Growth of nuclear industry. B. Commission contracts with utilities. C. Perpetual waste care. D. Reduce AEC capital investments. E. Technical and economic information. LIST OF ENCLOSURES Appendix 1-Comparison of fuel reprocessing charges. Appendix 2-Comparison of fuel reprocessing rates. Appendix 3-Fuel processing, private reactors, fiscal year 1966 and fiscal year 1967. Appendix 5-Difference in costs to reactor operators, fiscal year 1966 and fiscal year 1967. Appendix 8-AEC public announcement, issuance of construction permit. I. INTRODUCTION A. AEC obligation to reprocess irradiated fuels In March of 1957, a policy was announced under which AEC would 1. accept irradiated nuclear fuel from licensees for financial settlement of lease accounts, 2. make payments for licensee produced plutonium and U233, and 3. provide for charges for chemical reprocessing of irradiated fuel. |