situation opposite a contractor with a firm profitable business such as the public utility companies. If the proposition were being made by such principals, the losses would be divided between the stockholders and the taxpayers. The Commission could take the position that such losses are ordinary business risks. In summary, your Committee is obliged to recommend against the proposition primarily because (1) we do not believe the processes for the wide variety of fuel materials are "firm" enough to be contracted on a production basis, especially in view of the operating hazards inherent in the business; and (2) we do not believe that this is the proper vehicle for carrying out plant process development in view of other facilities which are already in being. By way of summary, we would answer your original six questions as follows: (1) The technology base is not now adequate to design a production plant. Start of design now backed by a continuing Commission-supported research and development effort on the specific proposal could offer reasonable assurance of an operable plant with some delay in timing. (2) A prime area for research and development to back the NFS proposal would appear to be a demonstration of the chop-leach process on irradiated fuels. Additional process work on the specific irradiated fuels will be necessary. (3) The need for major additional capital may be substantial. (4) A staff in excess of 200, including over 20 technical personnel, for plant assistance would appear to be a requirement. (5) A startup period in excess of 6 months, possibly approaching 12 is estimated, with at least 3 months being fully staffed on cold and tracer-level operation. There will be several startups processwise. (6) After a year or two of operation, an onstream efficiency of 85 percent for the 300 process days would appear reasonable. While it may be presumptuous on our part, we are prepared to suggest the following recommendations: (1) Take cognizance of the fact that the present state of the chemical separation art is not firm enough for production contracting of power reactor fuel recovery. (2) Make the necessary arrangements in present facilities to— (a) obtain plant experience for the various processes; and at the same time (b) recover materials for material balance processes; and (c) obtain valuable cost experience. (3) Hold in abeyance the commitment of money and land to a new site until the available commercial load becomes substantial. ADDITIONAL AEC REQUEST AND TECHNICAL TEAM REPLY AEC to technical team, December 20, 1962 (TWX NR-590) "Please advise ASAP any adjustments your position as expressed in review committee report to Commission on basis of following potential modifications to NFS project: "1. Elimination of Na-bonded and SS-cermet fuels. "2. Continued Commission R. & D. of the same character, magnitude, and timing as previously planned but supplemented by program or cold mockup of some mechanical handling equipment as discussed by Culler in December 17 meeting." Technical team to AEC, December 21, 1962 "In reply to your TWX NR-590, we have reviewed our report to the Commission regarding NFS project in light of discussions with NFS in Germantown December 17, 1962, and the following modifications to the proposal: "1. Elimination of Na-bonded and SS-cermet fuels. "2. Continued AEC R. & D. as previously planned but supplemented by some mechanical mockup at Oak Ridge. "In view of the fact that NFS had considered and acted on some of the items we mentioned as deficiencies and, with the above modifications, the need for major additional capital would appear to be reduced although not necessarily eliminated. "As explained to NFS, we feel that the technology base is adequate for a development facility, the only type we can visualize for power fuel processing for perhaps 5 to 10 years. Such a facility with the simplified load indicated in (1) might require fewer personnel than indicated in our review with the Commission. "Our comments to the Commission regarding a production facility, defined as one capable of 300 revenue days per year still apply. This does not mean to imply that NFS could not meet contractual obligations for the relatively small load available for 1965 processing although some delay might be anticipated. Startup support of a technical nature from Commission facilities during the initial processing of each type fuel may be expected to minimize startup delays. "Also, to confirm Monday's conversation, a delay of 1 or 2 years in the start of such a facility would appear to offer very little advantage in terms of additional data to help firm design for the NFS proposal. This opinion in concurrence with J. E. Cole, F. L. Culler, S. Lawroski. Technical team member Ayers to AEC, December 26, 1962 "R. J. CHRISTL." "From A. L. Ayers. In general, concurrence with Christl's reply to your TWX NR-589. Assume NR-589 and NR-590 identical.1 Personal position would change emphases on following items: "1. Additional capital still probable though reduced. "2. Major manpower reduction possible only if Commission facilities increased scope of work to include direct support NFS on sustaining basis. "3. Startup support from Commission facilities may prove necessary. "4. Undissolved solids in chop-leach should be studied thoroughly." Representative PRICE. Is the Commission unanimous in its support of this project? Mr. RAMEY. Yes, sir. CHARGES TO INDUSTRY FOR PROCESSING FUELS BY NFS Representative PRICE. Under the NFS proposal, once the Commission withdraws from receiving a specific fuel, does the AEC have a responsibility for seeing that private processing services remain available at reasonable charges and terms? Do you have any plan for policing this? Either one can answer this. Dr. WILSON. The Commission yesterday took some action with regard to that and indicated that once a contract is arrived at between NFS and a private entity, arrived at in arm's-length dealing, then we would not take any part in that, but when new customers with fuels came along, and if they were not able to reach a satisfactory agreement with NFS, we would then consider the matter of whether the NFS charge for that fuel was reasonable or whether we ought to do it ourselves. In other words, we are reaching a final decision on those utilities which have made contracts at arm's length, as I say, but we are not going to force other people into that same pattern without a specific finding that the charges are reasonable. STABILITY OF REACTOR FUEL REPROCESSING COSTS Representative PRICE. I think it has been said that the utilities look forward toward the day when you have a private enterprise engaged in the reprocessing program because it would bring stability to their reprocessing costs. Do you agree? Dr. WILSON. Very much so. It would also bring very much information. This conceptual plant really doesn't give you any information as to how you should design fuel elements to make for mini 1 These TWX's are identical. mum reprocessing costs. It gives a lot more information and it gives them a 15-year contract at a fixed price, which is quite reassuring to them. We did not agree beyond the 5-year period. Representative PRICE. It is a 5-year commitment which you are almost agreed upon will have to be extended. Mr. RAMEY. In part. Dr. WILSON. The period for which we have agreed to accept fuels for reprocessing was until 1967. Industry has no assurance beyond that as to what the charge will be under Government processing. But under this private processing they can know what it is going to be for 15 years. PROVISIONS TO PERMIT THE GOVERNMENT TO TAKE ADVANTAGE OF ANY UNFORESEEN COST REDUCTION Representative PRICE. What provisions are there under the baseload contract to permit the Government to take advantage of any unforeseen cost reductions that may occur? Mr. ABBADESSA. We have a provision in the contract, sir, that relates to reduced pricing. The factor that will probably have the biggest effect on a reduction in price is increased load. In our contract we have a basic fixed price of $23,500. We have a schedule in the contract that goes from a 300-revenue-day load up to a 350-revenue-day load, in increments of 5. At 350 revenue-days, the base charge will be reduced from $23,500 to $21,400 for the entire 350-revenue-day load for all of NFS's customers. This computation works out to a reduction of about $735,000 if there is an increase of 50 revenue days. WASTE DISPOSAL Representative PRICE. Another problem in connection with this plant would be the matter of waste disposal. The Commission has a number of sites which have already been set aside for the storage of highly radioactive waste. Why should another disposal site be established? Mr. QUINN. The Commission has taken no action to influence where this private reprocessing plant should be located. We believe this is a judgment for private industry to make. Once they comply with the health and safety requirements of the Commission, that would be the extent of our responsibility. Representative PRICE. Wouldn't it be more economical if the proposed plant would be located adjacent to an existing disposal site? Dr. WILSON. You would have shipping charges to the point of disposal; whereas here they can dispose right at the site. Mr. QUINN. Initially NFS did give consideration to locating their facility adjacent to an AEC site. However, they decided on their own that there was some advantage in locating it in New York. Representative PRICE. What are the problems involved in the operation of a disposal site? Do you have monitoring jobs to do? Mr. QUINN. There will be monitoring jobs, primarily to monitor the waste storage tanks to assure that they are not leaking, and if a leak should develop, to take such action as necessary to prevent contamination of the environment. Representative PRICE. Who would have the responsibility? Mr. QUINN. Under this arrangement the responsibility would be with NFS and with the New York State people. Representative PRICE. Has the Commission discussed the matter of waste disposal with the NFS people and have any arrangements been suggested or worked out? Mr. QUINN. Under this arrangement NFS or New York State, as the case may be, would be a licensee of the Commission, and would comply with the Commission's criteria for health and safety. Dr. WILSON. But we have talked it over with them. Representative PRICE. Do you create any additional hazards by the proliferation of waste disposal sites throughout the country? Mr. QUINN. I don't think there is any additional hazard, Mr. Price. If we look at the matter of integrity of tanks, if these fuels are to be processed anywhere, it is going to require about the same number of tanks. These tanks would have to be monitored in any event. So I do not believe there is any additional hazard involved. Representative PRICE. Are there any cost factors in connection with the disposal site that is involved in the cost of the plant itself? Were these costs included in the figures that we have already seen for the plant? Mr. QUINN. The costs of the plant as presented do provide for waste storage facilities. Representative PRICE. Does New York State participate in any way in the financing and in the management of the disposal site? Mr. QUINN. Yes. The portion of the facilities that will be covered by the New York State financing will include the waste storage facilities. Under this arrangement, New York State would be assuming responsibility for perpetual care of these wastes, so it is logical for these facilities to be in their hands. Mr. CONWAY. What is the difficulty or reasons why you have not been able to reach agreement with NFS as far as the Federal Government's contribution to the cost of the perpetual care of the waste is concerned? We had testimony this morning that this was an additional cost that you had not been able to factor in yet because you are still negotiating. Mr. QUINN. The reason that these have not been completely defined yet is that the wastes resulting from processing certain of the Government fuels which may be supplied are of a different nature than those from the fuels which would be coming from the licensees directly to NFS. Until the costs for these Government fuels have been defined and an estimate made for the allowance necessary for perpetual care, we cannot reach a final agreement. Mr. CONWAY. Is this because the Government fuel is more difficult to handle, or to guarantee it will be safe? Mr. QUINN. Not necessarily so. It is just that it will be a different chemical composition, and in some cases may require the use of stainless steel tanks for storing the waste rather than conventional carbon steel tanks. Mr. CONWAY. Will the Federal Government then have any responsibility for this waste coming from Federal reactors in the event the moneys made available from the Federal Government are not sufficient to take care of that portion for perpetual care? Mr. QUINN. We expect at the time we enter into the contract it will be on a fixed-price basis for each of the fuel types, so that any liabilities with respect to overruns on such waste storage tanks would be the responsibility of NFS. Representative PRICE. The Chair would like to say that in order to keep the meeting moving and in order to get into the record a number of questions which the committee would like to have answered for the purpose of the record, I would like for our executive director to continue the questioning. I think you had some questions that Senator Jackson desired to be asked. If you would ask those questions for a moment, the Chair will excuse himself and answer this rollcall in the House, but the meeting will continue. Mr. CONWAY. Let the record show that the next line of questions are questions that Senator Jackson desired to have answered, and which he, if he were present now, would have put forth himself. Unfortunately, he had another meeting and was unable to get here. UTILIZATION OF EXISTING GOVERNMENT REPROCESSING FACILITIES Are we now using existing Government reprocessing facilities to the fullest extent, or is there a basic chemical reprocessing capacity now owned by the Government which is not being fully utilized? Dr. WILSON. There is a chemical reprocessing facility not specifically designed for power fuels but which could be adapted to them, which is not full. Mr. CONWAY. Has the Congress authorized or appropriated money in the past years to modify those facilities to make that possible? Dr. WILSON. I think we have held up. Mr. QUINN. We had a project in fiscal year 1959 which was authorized at a $15 million level and funds were appropriated to the extent of $10 million for the purpose of modifying existing AEC facilities to handle the power reactor fuels. Mr. CONWAY. How much of that money has already been spent for that purpose? Mr. ABBADESSA. We have costed or committed as of March 31, 1963, $3,431,711. Mr. QUINN. I would like to make clear on that point that this expenditure was not to provide processing capability in our plants; we never did go forward to provide processing capability. The funds that have been expended to date have been for design work related to such modifications, and to provide a storage basin and receiving facility, to handle such fuels as would be delivered to AEC under the 1957 announcement. Dr. WILSON. And which can be used for other fuels. Mr. CONWAY. How much of the $10 million appropriation still remains that has not been committed? Mr. ABBADESSA. That has not been committed or programed, sir, we have available now $4,520,789. Mr. CONWAY. If that money were used to modify one of the existing facilities, would that facility be able to handle the type of fuels that the NFS facility is designed to handle? |