Mr. ATKINS. And where they have said that on-site safety approvals are necessary before they require low-power testing but that the off-site approvals are not necessary, is that correct?

Governor DUKAKIS. That is correct.

Mr. ATKINS. So, given that, as I understand it, once low-power testing has taken place, which would probably be within the next several months, is their timetable, then the containment vessel in the facility, much of it would be contaminated, which would severely restrict the value of that construction and that facility for nonnuclear purposes.

Governor DUKAKIS. That is correct.

Mr. ATKINS. Now, at that time, assuming that the NRC recognizes the enormous safety hazards that are posed to people not just in the 10-mile radius, but people such as my constituents who are outside of that 10-mile radius, then the Public Service Company of New Hampshire and the Massachusetts utilities that own a portion of this could come before-in the case of the Massachusetts utilities, the Massachusetts Department of Public Utilities, and basically allow or ask to allow to have allowance in their costs for their costs of construction of Seabrook and an allowance for whatever damage was done to cleanup that was necessary from the lowpower testing.

Governor ĎUKAKIS. That would depend, Congressman, on the effects, if any, on our ability to regulate them under those circum

stances.

TESTIMONY OF SHARON POLLARD

Ms. POLLARD. The difficulty with the Massachusetts utilities who are owners of a piece of Seabrook is that none of them are regulated by the Department of Public Utilities.

In the case of the New England Electric Systems, they are regulated by the Federal Energy Regulatory Commission, FERC; and, in the case, for example, of MMWEC, the municipal utilities who have bought a piece of Seabrook, they, as well, are not yet regulated by the Department of Public Utilities.

Mr. ATKINS. But their rates will be regulated by the Department of Public Utilities?

Ms. POLLARD. No, they will not.

Mr. ATKINS. They——

Governor DUKAKIS. In the case of municipally-owned electrics, we do not regulate their rates. We could change our law and do that, but, at the present time, under the existing law, we do not now. Mr. ATKINS. The thing that particularly concerns me is that people are proceeding on a course where they will contaminate the facility.

Governor DUKAKIS. That is correct.

Mr. ATKINS. They will create a situation where the facility will have virtually no value for any other purpose, while right now it has substantial value, and then can come before the regulator and ask the public and the ratepayers to pay the cost of their bad judgment even though everybody told them that it was bad judgment at the outset, and I think it would be very helpful if the DPU would send a strong message to the companies and to their stock

holders that, if they proceed with low-power testing that they will eat the cost that they have from that if the facility is subsequently in litigation, I presume, not allowed to open, because it poses an imminent danger to public health and safety.

Governor DUKAKIS. I would agree with that, and Secretary Pollard would like to comment as well.

Ms. POLLARD. I would just like to add that Massachusetts, through our Attorney General, is involved in prudency hearings that are presently under way at the FERC, for Montauk Electric and the New England Electric Systems, so we are trying to address some of those issues that you have mentioned, Congressman, by representing ourselves at appropriate agencies, certainly on the State level, but on the Federal level as well.

Mr. ATKINS. So, we are trying to deal with that process, understanding the limits of your regulation that we would send a clear signal to all of the utilities involved in Seabrook, that, if they want to proceed in this high-risk strategy, that they proceed at their own risk.

One of the things that involves me, and we are really, when we are looking at the licensing process, we are looking at essentially risk assessment, and what has happened with Seabrook is that all of the risk is being assumed by the citizens who are in the affected areas, in the greater areas, and by the ratepayers.

And, as a specific instance of that, I happened to be on the Interior Committee that is involved in the reauthorization of the socalled Price-Anderson Act, which is essentially the government stepping in, as we do in no other industry to say that we will cover the insurance risks, because all of the insurance companies in the world say that your power plant is too risky for us to provide full insurance for the potential damage that it could do.

The Federal Government in the name of the taxpayers of the United States will step in and will provide that insurance coverage above $160 million, which, of course, is a teeny fraction of the potential damage that would be caused by even the smallest kind of accident, and the utilities are asking the taxpayers, on the one hand, saying to the taxpayers.

We don't-we can't insure ourselves because the risks are too great, and we want you, the taxpayers to pay for our insurance.

And, then, on the other hand, turning around to you, as the Governor, when there is not one single public safety professional that says that there can be a responsible and safe evacuation plan, and saying that this evacuation plan is safe, and we will proceed to open the plant, despite your objections. And that makes no sense to me, and I would hope at a bare minimum that we would say when we reauthorize Price-Anderson that if you do not have the approval of the local public safety officials and the Governor in the case of your evacuation plans that you cannot be a part of the Price-Anderson program. I do not see how everybody can say that the evacuation plan is not safe, is not adequate and then ask the taxpayers to pick up the cost of the risk, which the nuclear companies say does not exist.

Governor DUKAKIS. Well, Congressman, what you have said underscores what I was trying to say when I talked about this unusu

al kind of exemption from State oversight that we provide for this particular form of energy generation.

Now, you all are much more conversant with the history of Federal atomic energy legislation than I am, and I have to assume that it was a combination of the heavily military aspects of this back, coming out of World War II, and perhaps a deliberate national policy to encourage what might be referred to as an "infant industry" at the time, and that certainly was, I assume, behind PriceAnderson and this rather strict limitation on liability, which we don't apply to the best of my knowledge to any other kind of, any other form of electric generation.

I am not arguing for a national policy which disfavors nuclear; I am just saying, let's supply the same rules, whether it is on the insurance side, or the local and State regulatory side, that we applied to all other forms of energy generation.

Now, in response to your particular, to your specific question, I can assure you we will do everything we can to deliver that message to the extent that we have regulatory authority. I would strongly urge you and your colleagues and the Members of Congress who feel as strongly about this as we do, to make your views heard at FERC, in connection with these proceedings which we are currently involved in. I think your proposal for some change in Price-Anderson is a kind of minimal change, which, at least, would begin to move us in the direction of requiring that these plans stand on their own feet in the marketplace, which is, after all, what this country is supposed to be all about, and I should also point out to you—and I think you are aware of this-that in the case of at least two other substantially completed plants, the Midland plant in Michigan and the-plant in Ohio, those utilities made a judgment that conversion to a more conventional form of energy was the soundest policy from an economic standpoint-I assume from their standpoint economically and their ratepayers, and, as best I understand, those conversions are now proceeding.

There is no question-there is no question that if low-power testing begins at Seabrook, the ability of the utility, and of all of us working with the utility, to adopt the option which has been adopted now in Michigan and Ohio would be severely compromised if not eliminated.

Mr. ATKINS. I would hope, Governor, that you could perhaps get the Department of Public Utility to figure out what the precise potential was to Seabrook would be if they contaminate the facility with low-power testing, and publicly state what that figure is, and then be sure that the stockholders, particularly, in the company appreciate the risks that they will be taking if they contaminate the facility and then do not get the approval to go on to the, to fullpower testing.

What I sense here is the utility has the strategy of-it is like the child who murders both of their parents and then expects to throw himself on the mercy of the court as an orphan-that they are taking a strategy which will put them even further in the soup and then expecting to be able to come to the DPU and to other regulators and to be able to get relief at the ratepayers' expense. And I would hope that they get that message soon that they cannot do that.

Governor DUKAKIS. Well, that suggestion is well taken, and we will proceed along those lines. I would assume that in New Hampshire the problem would be even worse from the standpoint of impact on the rate structure, but at least insofar as Massachusetts is concerned, I think your suggestion is a good one.

Mr. ATKINS. Thank you and Secretary Pollard and Secretary Barry for your leadership on this issue. It has been very important for the State in educating people beyond the ten mile zone of the importance of this issue for the whole State.

Mr. MARKEY. Will the gentleman yield?

Just to interject this point-because Seabrook is owned by a consortium and deals in interstate commerce and its sales are wholesale, it does not come under the jurisdiction of the Massachusetts DPU, but rather under the FERC, and I know it is not a comforting fact to find out that the FERC has never disallowed a nuclear power plant action on the basis of imprudence, even including the worst case, which is the Grand Gulf case down in the South.

So, unfortunately, we have an administration which has turned a blind eye to some of the worst financial, economic management decisions which have ever been made in the history of this country, and we do have a battle which I think is growing between the States and the Federal Government with regard to these costs.

The gentleman's time has expired. The Chair now recognizes the gentleman from New Hampshire, a friend of the SubcommitteeBob Smith.

TESTIMONY OF HON. ROBERT C. SMITH, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW HAMPSHIRE

Mr. SMITH. Thank you, Mr. Chairman.

Governor, I think the thing that frustrates all of us as public officials, and certainly not only the utility itself but the people and the ratepayers and private citizens is the fact that we are viewing the flawed process, the flawed Federal process, as you indicated, the process that forces us now to deal with an issue, an evacuation plan that should have been written and agreed upon at the time the plant was first authorized.

And I think I would like to deal specifically with you on the question of jurisdiction. I agree with you that State and local_control, and certainly an advocate of State and local control, as I am sure you are as a governor-it can cut both ways, though, and I wanted to ask you specifically about it.

For example, if the NRC tries to, in stating that the plan is safe, imposes it upon the will of the citizens of the Commonwealth of Massachusetts or New Hampshire, and you object, then you wish to have that objection sustained, and I agree with you; but how about if it works the other way, and this is one of the dangers that we face. How about if it works that people at the State and local level disagree with, say, the NRC? The NRC says it is not safe, whether, in this case nuclear, but perhaps it might be something else along the line some other danger, and you say that it is, and I say that it is not.

How do you deal with that? How do you write the perfect legislation to deal with it?

Governor DUKAKIS. Well, you and your colleagues have had plenty of experience at that. For example, when it comes to clean water and clean air, we have a Federal regulatory scheme which sets certain minimum standards; but in virtually all of those cases, I think I am correct in saying that the States can, or the local communities can go beyond those standards. There is no preemption there, but there is a kind of Federal floor which is a matter of national policy the Congress has enacted into law because I assume there is a national interest in a clean environment, at least at some prescribed level; and we operate under that system, but we are also free, thanks to Federal legislation, to go beyond and be tougher if we want to be.

There are there is legislation, as you know, currently before the Congress on the subject of pesticides, where there is a lot of pressure to have a national standard for pesticides. I objected to that legislation because I have no objection to some kind of minimum Federal floor but to suggest to me that we cannot protect our citizens if we think that certain pesticides are more dangerous, say, than the Federal regulatory authorities, I think flies in the face of the traditional role of State and local governments to protect the health of their citizens.

So, we have all kinds of examples in this country of what I would call a dual system in which nationally we would set some minimum standards, and we would say:

Look, wherever you live in this country, you are going to be protected up to a certain threshold. If the local communities or the State wants to go beyond that and exercise their police power, they can do so.

And it works reasonably well.

What puzzles me is that, in this particular area- and it is about the only area that I can think of-we do not have that system, and I think that is what is so puzzling to the governors, Republicans as well as Democrats, liberals, conversatives, whatever-all over the country. You just do not understand why in this particular area, we do not have the kind of authority that traditionally, and certainly over the last 20 or 30 years, you have given us, as part of what I would call a joint regulatory scheme, in a whole flock of environmental public health and other areas.

Mr. SMITH. Following up on the jurisdiction plan, you have been criticized for being basically inconsistent on the issue because if we look at-there are obviously nuclear power plants, other nuclear power plants in the State of Massachusetts. There is certainly a nuclear reactor at Lowell. That is directly under your jurisdiction. Governor DUKAKIS. Right.

Mr. SMITH. You do not have an evacuation plan for that one. I agree that the magnitude; there is a difference between the magnitude in reactors obviously; but how do you respond to that?

Governor DUKAKIS. Well, I think we are learning everyday. I think Chernobyl was an event which certainly had an enormous influence on me, and I sense on the public all across this country and on the Congress, as well; and I think you are going to find us being a lot tougher, a lot more thorough about what we are doing with respect to public safety and public health in these areas than we were before.