25 We believe that ABC representation on the PMC staff gives ABC a mechanism for obtaining information on day-to-day project activities and provides added expertise för accomplishing the program. PREREQUISITES FOR THE START OF CONSTRUCTION The original memorandum provided that three prerequisites be met before construction of the demonstration plant began: --AEC must agree in writing with PMC and TVA that, in the event of project termination, it will at its own expense take custody of and decommission or dispose of the demonstration plant, unless TVA agrees to retain the plant. --AEC must obtain legislative authorization and provide written agreements indemnifying PMC, TVA, and Commonwealth. --AEC, PMC, TVA, and Commonwealth must agree that the The amendment to the memorandum sets forth two more prerequisites for the start of construction. One requires that AEC, PMC, TVA, and Commonwealth agree, in writing, that the breeder reactor plant can be built and operated in accordance with the laws on the protection of the environment. AEC officials pointed out that, under the original memorandum, PMC would have to obtain a license from AEC before constructing the plant. They said that, before AEC would issue a license, PMC would have to meet provisions and policies of laws on the protection of the environment. They stated that this prerequisite was added to emphasize the importance of the environmental issue, particularly in view of the concern expressed by environmentalists during the hearings before the Joint Committee on the proposed arrangement. The other prerequisite was that PMC provide TVA with a PMC board resolution specifying the part of the Clinch River . site on which the plant, access roads, and other related facilities will be constructed. As stated in the proposed contract among AEC, PMC, TVA, and Commonwealth, PMC must select specific parts of the land needed for the project with a view toward preserving as much of the remainder of the tract as possible for future development of additional power facilities by TVA. According to AEC officials, this prerequisite provides formal documentation emphasizing that PMC will have exclusive possession of the land on which the plant will be constructed even though TVA holds the land in the name of the U.S. Government. From what we were told, it appears therefore that the two additional prerequisites in the amendment to the memorandum clarify the positions of AEC and PMC on the construction and operation of the plant. As we mentioned before, the original memorandum provided, as a prerequisite to the start of construction, that AEC must agree in writing with PMC and TVA that, in the event of termination, it would at its own expense take custody of and decommission or dispose of the demonstration plant, unless TVA agreed to retain the plant. Although the original memorandum did not specifically provide that AEC seek legislative authorization to assume this responsibility, the memorandum provided that: AEC will endeavor to obtain additional AEC officials told us that, when the original memorandum was prepared, the above clause was intended to cover AEC's need to obtain legislative authority to agree to assume responsibility for the demonstration plant if TVA decided not to retain it under the agreed terms. In the foreword to the record of the Joint Committee's hearings on AEC's proposed arrangements for carrying out the breeder reactor project, the Committee recognized that AEC would need this legislative authorization. 28 Consequently, the proposed contract among AEC, PMC, TVA, and Commonwealth provides that plant construction not begin unless AEC has first obtained the legislative authorization enabling it to agree, in writing, to assume responsibility for the demonstration plant if TVA decides not to retain the plant under the agreed terms. In our opinion, AEC's decision to seek this legislation is in accordance with the intent of the original memorandum. APPENDIX ! RESPONSIBILITY FOR TECHNICAL SUPERVISION OF The original memorandum provided that the contracts to be negotiated among the parties specify those project activities in which AEC would participate. The amendment to the memorandum and the proposed contract among AEC, PMC, TVA, and Commonwealth stated that AEC would provide the technical supervision over the reactor manufacturer and the architect-engineer on all matters pertaining to the nuclear steam supply system. This system includes the nuclear reactor, the steam generation system, and any other equipment and structures for providing steam for the steam turbine. AEC officials told us that, although the original memorandum did not specify that AEC be assigned as technical supervisor for the nuclear steam supply system, such an assignment had always been contemplated in view of AEC's expertise and experience in the reactor technology field. They pointed out that this assignment was a logical extension of the cooperative agreement which set out as one of the project objectives the maximum use of technology developed or being developed in AEC's programs. According to the proposed contract among AEC, PMC, TVA, and Commonwealth, AEC's technical supervision would generally involve the review and approval of (1) the reactor manufacturer's and architect-engineer's design work for the nuclear steam supply system to insure compliance with PMC's plant design specifications, (2) the technical adequacy of component design, fabrication techniques, and quality assurance plans and procedures, (3) the reactor manufacturer's and the architect-engineer's compliance with PMC's overall schedules and budgets, (4) technical aspects of subcontract procurement actions, and (5) technical aspects of installation and construction of the nuclear steam supply system. Under the proposed contract PMC (1) has the authority to modify standards compiled by AEC's Division of Reactor Development and Technology and other standards and (2) has approval rights over any significant matters relating to the nuclear steam supply system. It appears possible, therefore, that PMC could disapprove significant matters relating to the nuclear steam supply system which AEC has approved. In such an event it appears that AEC's recourse would be to 72-818 0-76-3 |