B-115398 Pursuant to the 1975 law. ERDA proposed criteria to the JCAE for its approval. On April 29, 1976. the JCAE approved the most recently submitted criteria. Those project criteria appear at page 63 of Modifications in the Proposed Arrancements for the Clinch River Breecer Reactor Demonstration Project. Hearings Before the Joint Committee on Atomic Energy, 94th Cong.. 2d Sess.. April 14 and 29. 1976 (1976 Hearings). C. The Present CRBRP Criteria and Contract. As a result of the JCAE's action of April 29, 1976 (a rollcall vote). the LMFBR demonstration program at the Clinch River site is governed by criteria that call for the design, construction. and operation of an LIFER plant. These program criteria state that the CRBRP's major objectives are to demonstrate the technology pertaining to, and the reliability. safety, and economics of, LMFER powerplants in the utility environment. Other objectives are to: --provide for meaningful identification of areas requiring. --assist in developing an adequate industrial base; --provide for meaningful utility participation and experience in developing, acquiring, and operating LMFBR plants; --help assure overall program success; and --demonstrate and maintain U.S. technological leadership. The criteria also specifically set forth design requirements and plant objectives stating, among other things, that the plant's first core is to use mixed oxide fuel consisting of uranium and plutonium and that it be designed. fabricated. constructed, tested, operated, and maintained in conformance with established engineering standards and high quality assurance practices. B-115398 Pursuant to the JCAE-approved criteria, ERDA entered into a cooperative arrangement with the Project Mangement Corporation (FMC). the Commonwealth Edison Company, and the Tennessee Valley Authority (TVA) on May 4, 1976. That .contract recognizes the controlling statutory criteria for the LYFER. For example. the contract states. pertinently: D. A. Para. 1.1.9: "'Project' mears pursuant to this contract, manage and Recent ERDA Plans and GAO Evaluation. On May 19, 1977, Mr. Robert W. Fri, Acting Administrator. ERDA, sent to the JCAE notice of ERDA's plans to revise the CRBRP. Mr. Fri stated, inter alia. ERDA's plans for the "cancellation of construction, component construction. licensing and commercialization efforts for CRBRP. but completion of systems design;" This letter clearly recognized that the plan proposed by the President and reflected in the May 18, 1977. deferral message would necessitate revision to the present JCAE-approved CRBRP criteria, and acknowledged that an amendment to the statutory authorization may be in order if the President's program revision is to be implemented. Mr. Fri stated: : : "At the direction of the President, and "Appropriate negotiations will, of course. enting action concernin tre orect. 2nc "For the prescribed statutory period In an attachment to his letter. Mr. Fri discussed the existing four-party contractual agreement and those contract amendments that would have to be made in order to limit B-115398 : LMFBR activities to systems design efforts. Systems design (roughly 60 percent of the total design work) would, under the President's proposal. be completed. Pursuant to this proposal. ERDA has reduced its fiscal year 1978 budget request from $208.7 million to $162 million. The funds requested would be used to continue systems design activities; to terminate detailed design. licensing. procurement. and construction activities; and to settle claims, primarily those anticipated from the termination actions. Thus far, we have found no evidence indicating that project activity has been significantly slowed down as a result of the executive branch's proposed change in program objectives. To date, we have found no procurement actions that have been delayed or cancelled and ERDA officials told us there were none. However, the project office in Tennessee, at the direction of ERDA headquarters, recently submitted a list of 10 scheduled procurements to ERDA headquarters for approval. According to an ERDA procurement official. the proposed procurement actions involve contracts by Westinghouse, the lead reactor manufacturer, with its subcontractors. The amount involved in these procurements is about $9.8 million. (Should ERDA decide to prevent award of any of the subcontracts it may develop that further questions will exist regarding such actions in.light of the Impoundment Control Act of 1974, discussed below.) We compared the proposed changes on the Clinch River LMFBR project as submitted by ERDA to the JCAE on May 19. 1977, with the existing criteria. As part of this comparison. we discussed the criteria with the General Manager of PMC (the contract party that represents the utility participants in the project) on a line-by-line basis to pinpoint the specific program changes that would result from the President's actions. Based on our examination, we confirm that ERDA'S proposal of May 19, 1977. represents a notice of its intention to proceed with the CRBRP in a way that will result in a program that does not fulfill major objectives of the existing JCAE-approved statutory criteria; nor the object of the authorization itself--to operate an LMFBR demonstration plant. We asked ERDA officials to give us their estimate of the additional costs that would be incurred assuming ERDA terminated the project, except for systems design, on or about July 26, 1977, and the Congress subsequently provided the B-115398 funds to continue the project on December 1. 1977 We chose a December 1, 1977, date because it allows the Congress an opportunity to consider fully whether to go ahead with LMFBR efforts and the associated funding. Although it is uncertain when the Congress will make its decision on the project. and how quickly or completely ERDA may implement the proposed discontinuance of the program. we believe that the December date provides a good indication of the impact a project termination will have prior to Congress having an opportunity to fully consider the matter. ERDA provided us with cost and schedule information using three assumptions: 1. Assuming the licensing process could begin where it was stopped. project costs would increase by about $346 million and plant operations would be delayed between 1 and 1-1/2 years. To restart the project where it was terminated in the licensing process, however, probably would require legislation that would. in effect. circumvent some of the normal licensing processes. 2. Assuming the licensing process would have to begin with a new application, project costs would increase by about $546 million and plant operation would be delayed over 3 years. Neither this assumption nor the first acccount for the possibility that ERDA may be required by the Nuclear Regulatory Commission (NRC) to locate the plant at a different site if projected plant operation is delayed. Such a relocation appears to be a distinct possiblity based on past NRC proceedings on the Clinch River Project. In fact, the Deputy Director. Division of Site Safety and Environmental Analysis, NRC. told us that if the CRBRP is delayed for 2 years or more, it would be very difficult, if not impossible, for the NRC staff, in its analysis, to conclude that it is cost beneficial to locate the demonstration reactor at the Clinch River site. 3. Assuming the plant would have to be relocated, project costs would increase by about $1.1 to $1.3 billion and plant operation would be delayed 5 to 6 years. |