authorizing operation of the Three Mile Island (TMI) Nuclear Station, Units 1 and 2, that because of the March 28, 1979, accident at TMI, (see Chapter 2) the pools were unwilling at that time to make $160 million in nuclear liability insurance available for the TMI site, despite the licensee's request for such increased coverage. The pools' principal reason for not increasing the primary insurance available (from $140 million to $160 million) for TMI was their desire to limit clearly to $140 million their potential liability for claims and claims expenses arising out of the March 28 accident. The pools were opposed to increasing the primary insurance layer to $160 million because they could not be assured that the additional $20 million would not be used to satisfy public liability claims associated with the March 28 accident which arise either prior to or subsequent to May 1, 1979.

The Commission notified the licensees for TMI that it will be necessary for them to demonstrate that they are in compliance with NRC regulations by providing to the Commission evidence that $160 million in primary financial protection for both Units 1 and 2 is in place as of May 1, 1979, i.e., is effective as of that date. At present, the primary financial protection being provided for the Three Mile Island site is $140 million. The insurance pools have proposed an endorsement, which the Commission staff has reviewed and finds to be acceptable, that would provide $140 million in primary insurance to both Three Mile Island, Units 1 and 2, with an additional $20 million for Unit 1. The licensee is presently trying to obtain additional insurance coverage of $20 million apart from the present policy maintained by the licensee with the insurance pools.

On a related matter, the indemnity agreement executed by the licensee and the Commission requires that, in the event of payments made by the insurers under an insurance policy used as financial protection which reduces the aggregate limit of the policy, the licensee must apply to its insurers for reinstatement of the amount of these payments. The licensee has requested reinstatement of the approximately $1.3 million paid out for claims and claims expenses arising out of the March 28 accident. Insurance pools representatives have informed the Commission staff that they have decided not to reinstate these funds for Unit 2, although they will reinstate them for Unit 1 through a separate supplementary insurance policy. The practical effect of not reinstating that funds paid out for the March 28 accident is that, if there were another accident at Unit 2, there would not be the full amount of primary liability insurance to pay public liability claims resulting from such an accident.

If damages in a new accident exceed $140 million and the secondary financial protection layer is utilized, then other power reactor licensees will make up both the $20 million and $1.3 million claims expenses

differences through the retrospective premium assessment, by contributing at an earlier point to their share of the damages than would be the case if the accident had occurred at some other site with $160 million in primary insurance. If the damages exceed both primary and secondary financial protection layers, then government indemnity would make up for the increment of $20 million and would be a maximum of $85 million instead of $65 million. The limitation of liability would remain at $560 million. Total protection for the public would be unchanged.

Indemnification of Storage of Spent Fuel At Distant Reactor Locations

In November 1977, after public notice, the Commission issued amendments to the operating licenses of Carolina Power and Light Company's (CP&L) Brunswick Steam Electric Plants, Units 1 and 2, and H. B. Robinson Steam Electric Plant, Unit 2, to authorize CP&L to store irradiated fuel from the Robinson reactor in either of the spent fuel storage pools at the Brunswick facility and to have this storage indemnified. On January 8, 1979, the Commission published a notice in the Federal Register (44 FR 1751) requesting public comment on specific requests by two other utilities, Duke Power Company and Commonwealth Edison Company, to indemnify spent fuel stored at a reactor site different from the one where it was generated, as well as the generic issue of indemnification of spent fuel generated at one reactor but stored at another. Sixteen comments were received by the Commission and evaluated by the staff. The questions relating to the storage of spent fuel are presently under consideration by the staff.

Claims Handling Procedures Following TMI

Representatives of American Nuclear Insurers (ANI) arrived at Harrisburg, Pa., on March 29, 1979, the day after the Three Mile Island accident and began to assess the desirability of establishing a claims office. Following the advisory by the Governor of Pennsylvania that pregnant women and pre-school aged children living within a five mile radius of the plant should leave the area, ANI established a claims office to pay claims for living expenses for these people, as well as others who had special medical problems.

On March 31, 1979, the first day of operation at the emergency claims center, ANI made payments of almost $12,000. The payments increased daily and reached a peak of $167,286 on April 9, 1979. As of the end of 1979, cumulative payments for evacuation expenses and lost wages made to approximately 12,000 individuals were $1,306,495.

A total of over 4,200 claims were received by ANI in 1979, including 116 economic consequence claims. Not included in the total payments were the expenses incurred by the insurance pools, totaling approximately $160,000 at year's end.

Determination of an

Extraordinary Nuclear Occurrence

On July 23, 1979, the Nuclear Regulatory Commission published a notice in the Federal Register (44 FR 43128) that the Commission was undertaking a determination as to whether the March 28, 1979, accident at the Three Mile Island Unit 2 reactor (TMI-2) constituted an "extraordinary nuclear occurrence" (ENO) as defined in the NRC regulations, 10 CFR Part 140, subsections 140.84 and 140.85. On August 17, 1979, the Commission directed that a panel composed of members of the principal staff be formed to evaluate public comments received in connection with our July 23 notice and other technical information assembled by the Commission from its own and other sources. In late December 1979, the panel completed its investigation, evaluation, and analysis and reported to the Commission its findings and recommendation. The panel recommended that the Commission determine that the Three Mile Island accident did not constitute an ENO as defined in the Commission's regulations. This recommendation is advisory only. The Commission will make the final determination as to whether the accident constitutes an ENO. If the Commission accepts the panel's recommendation, defendants in Three Mile Island lawsuits would not be required to waive certain traditional defenses available to them and claimants would have the same rights that they normally have under existing negligence law.

Indemnity Operations

As of September 30, 1979, 134 indemnity agreements with NRC licensees were in effect. Indemnity fees collected by the NRC from October 1, 1978, through September 30, 1979, totaled $1,068,175. Total fees collected since the inception of the program are $20,103,254. Future collection of indemnity fees will continue to decrease as the indemnity program is phased out for commercial reactor licensees. No payments have been made under the NRC's indemnity agreements with licensees during the 22 years of the program's existence.

Insurance Premium Refund

The two private nuclear energy liability insurance pools, American Nuclear Insurers and the Mutual Atomic Energy Liability Underwriters paid to policyholders the thirteenth annual refund of premium reserves under their Industry Credit Rating

Plan. Under the plan, a portion of the annual premiums is set aside as a resrve for either payment of losses or ultimate return to policyholders. The amount of the reserve available for refund is determined on the basis of loss experience of all policy holders over the preceding 10-year period. Refunds paid in 1979 totaled, $2,054,989, which is approximately 60 percent of all premiums paid on the nuclear liability insurance policies issued in 1969 and cover the period 1969-1978. The refunds represent 84.9 percent of the premiums placed in reserve in 1979.

ADVISORY COMMITTEE ON REACTOR SAFEGUARDS

The Advisory Committee on Reactor Safeguards is an independent panel of advisors statutorily established to review construction permit and operating license applications for nuclear power reactors and other nuclear facilities and to report its findings to the Nuclear Regulatory Commission (NRC) which are made part of the public record. The Committee also provides advice to the Commission on a wide variety of safety-related issues such as the adequacy of proposed reactor safety standards, reactor safety research, specific technical issues of a topical nature, and the safety of operating power reactors. Topical reviews are performed by the Committee upon request by the NRC Commissioners or upon its own initiative. Upon request by the Department of Energy (DOE), the Committee reviews and provides reports with regard to the possible hazards of DOE nuclear activities and facilities. An expansion of the Committee's statutory responsibilities (Public Law 95-209) also requires Committee review of the NRC's Reactor Safety Research Program and submittal of an annual report to the Congress regarding its adequacy.

During fiscal year 1979, the Committee reviewed construction permit applications for two nuclear power units and operating license applications for four nuclear power units. The Committee also completed its review of the request for Preliminary Design Approval for a balance-of-plant standard safety analysis (BOPSSAR) for Fluor Pioneer Services Incorporated Balance-of-Plant design as applied to the Babcock-205 Standard Nuclear Steam Supply System (SNSSS). The Committee took note of and took no exception to the NRC Staff recommendations to license the Millstone Nuclear Power Station Unit 2 to operate at an increased power level of 2700 MWt.

The Committee completed its review of proposed operation of the DOE Fast Flux Test Facility (FFTF), a 400 MWt sodium cooled fast reactor located at DOE's Hanford Reservation in Benton County, Washington. The FFTF design and its use of sodium as a coolant make this reactor considerably advanced in

comparison to light-water-cooled reactors (LWRs) and, consequently, require standards and operating limits which differ from those applied to LWRs.

At the request of the NRC, the Committee prepared and in July 1979 submitted to the Commissioners "Comments on the NRC Safety Research Program Budget," NUREG-0603. This report included comments on the budget levels and program plans for the supplemental request for fiscal year 1980 to support research related to the accident at Three Mile Island Nuclear Station Unit 2 (TMI-2) as well as for the fiscal year 1981 budget. Special attention was focused on both the short- and long-term implications of the TMI-2 accident.

As a result of the accident at Three Mile Island Unit 2 (TMI-2), the Committee met on several occasions to inquire into the event and the effects of this accident

on other reactor systems. Eleven subcommittee meetings were held to investigate accident implications, assessments, and lessons learned, and a visit was made to the Babcock and Wilcox (B&W) simulator at Lynchburg, Va., to observe simulator training for reactor operators. Several members of the Committee visited the NRC Emergency Operations Center and TMI-2 site shortly after the accident to gain first-hand information regarding the status of plant conditions. As a result of this concentrated effort, the Committee prepared and submitted to the Commission five reports in which the Committee recommended a number of nuclear power plant studies and changes. The Committee also reviewed and reported to the Commission on on NUREG-0578, "TMI-2 Lessons Learned Task Force Status Report and Short-Term Recommendations." At the request of the NRC/TMI

Special Inquiry Group, the Committee has provided information regarding significant recommendations applicable to B&W and non-B&W reactors.

During the latter part of the year, the Committee began a discussion of the basic, underlying causes which may have contributed to the accident at TMI-2. This evaluation is to be continued during the forthcoming year.

In other activities, the Committee generated and provided reports to the NRC on the following topics: • Transportation of Radioactive Materials

• Combination of Dynamic Loads (Interim Report) • Status of Generic Items Relating to LWRs • Quantitative Safety Goals

• Proposed Rules on the Shipment of Spent Fuel

• Summary Comparison of Stainless Steel and Zircaloy Fuel Rod Cladding

• Bailly Generating Station, Nuclear 1 Piling Modifications

Pipe Cracking in Light Water Reactors

• Studies to Improve Reactor Safety

• Licensee Event Reports

During the fiscal year, the Committee prepared the following special reports to the Congress and Congressional Oversight Committees:

The Committees Second Annual Report to the Congress, 1978 Review and Evaluation of the Nuclear Regulatory Commission's Safety Research Program (NUREG-0496). This report focused on the NRC Safety Research Program with particular attention directed to Loss-OfCoolant Accident/Emergency Core Cooling Systems, Fuel Behavior, Primary System Integrity, Operational Safety, Advanced Reactor Safety, Extreme External Phenomena, Radiological Effects, Waste Management, Safeguards and Security, Risk Assessment, and Improved Reactor Safety.

• Report to Hon. Morris K. Udall, Chairman, Committee on Interior and Insular Affairs, House of Representatives, on the use of Licensee Event Reports to identify those events which have implications for improved reactor safety. Advice to the NRC was provided on 18 proposed Regulatory Guides and Standards, which dealt with topics such as the following:

• Loose Parts Detection

• Medical Evaluation of Personnel Requiring Operator Licenses

• Quality Assurance Program Requirements

• Containment Isolation Provision for Fluid Systems

• Fuel Oil Systems for Standby Diesel-Generators • Design Guidance for LWR Plant Radioactive Waste Management Systems

• Design, Testing, and Maintenance Criteria for Normal Ventilation Exhaust System Air Filtration and Adsorption Units in LWRS

• Selection, Design, and Qualification of DieselGenerator Units Used as Standby (Onsite) Electric Power Systems

The Committee reviewed proposed amendments to Appendices to 10 CFR Part 50, Domestic Licensing of Production and Utilization Facilities, on the following:

• Fracture Toughness Requirements

• Reactor Vessel Material Surveillance Program Requirements

• Modification of Emergency Core Cooling Systems In addition, the Committee reviewed plans to implement 40 CFR 190, "Environmental Radiation Protection for Nuclear Power Operation.'

Many other safety-related matters concerning nuclear power facility operations were considered by the Committee. Some of these are as follows: • Upgraded seismic design bases

• Anticipated transients without scram (ATWS) • Seismic design for nuclear power plant piping • Use of probabilistic assessment in the licensing

process

The Committee also began activities during the fiscal year related to the probabilistic assessment of selected nuclear power plant incidents, the development of quantitative safety criteria for nuclear facilities, and development of failure rate data for nuclear plant systems and components. These activities will continue into the forthcoming year.

In performing the reviews and preparing the reports referenced above, the Committee met in 12 regular and one special full-session meetings. In addition, 73 subcommittee and working group meetings were held and a total of 7 site-facility visits were made. Comments were received from members of the public with respect to several matters evaluated by the Commit

tee.

Members of the Committee met in Japan with representatives of Japanese nuclear safety agencies to discuss reactor safety policy and practice and the cooperative Emergency Core Cooling System program. Members of the Committee also participated in an NRC Staff meeting with the German Reactor Safety Commission (Gesellschaft Fur Reaktorsicherheit) to exchange experience and knowledge in the areas of waste management and interim spent fuel storage.

The NRC's responsibilities for regulating the possession, use and disposition of nuclear materials, and the safeguarding of nuclear materials and facilities, are carried out by the Office of Nuclear Material Safety and Safeguards (NMSS) under three major programs: the fuel cycle and material safety program, discussed below; the safeguards program, discussed in Chapter 5; and the waste management program, discussed in Chapter 6. Qualified States in the NRC's State Agreements Program have assumed regulatory authority within their borders over byproduct and source material and small quantities of special nuclear material, and the NRC exercises oversight responsibilities concerning these programs (see Chapter 8).

The fuel cycle and material safety program includes licensing and other regulatory activities associated with (1) the purification and conversion of uranium ore concentrates (after mining and milling) to uranium hexafluoride; (2) the conversion of the uranium hexafluoride (after enrichment in Government-owned diffusion plants) to ceramic uranium dioxide pellets and their fabrication into fuel for light water nuclear reactors; (3) storage of "spent" reactor fuel; (4) transportation of nuclear materials; and (5) production and use of reactor-produced radioisotopes. Among actions in these areas during 1979, the NRC:

• Completed 14 major licensing actions concerning uranium fuel.

• Completed actions on more than 5,100 applications for new materials licenses, license amendments and license renewals.

• Completed reviews of terminated AEC licenses involving source and special nuclear material operations to assist in uncovering indications of possible residual contamination at former licensee sites.

• Implemented Environmental Protection Agency

regulations limiting environmental radioactivity from reactor fuel production plants and exposure to the public therefrom.

• Issued the final "Generic Environmental Impact Statement on Handling and Storage of Spent Light Water Power Reactor Fuel" (NUREG-0575).

Prohibited the use of seven spent fuel shipping casks which did not meet fabrication requirements until an assessment could be made of their safety performance.

• Ordered medical licensees to perform tests for excessive molybdenum-99 levels in technetium-99 produced in generators at medical facilities, and to refrain from administering technetium-99 containing excessive amounts of Mo-99.

• Took a number of steps, in conjunction with the Department of Transportation, to strengthen regulation and inspections of shipments of lowlevel radioactive wastes to the three commercial burial facilities in the States of South Carolina, Nevada and Washington.

Fuel Cycle Activities

Analyses of all light water reactor fuel production plants have been completed in order to implement EPA regulations (40 CFR Part 190, effective December 1, 1979) requiring control of environmental radioactivity so that the maximum potential exposure of any member of the public will be limited to 25 millirems. Each license will be conditioned to limit radioactivity in effluents to meet the requirements.

NRC has completed environmental impact appraisals for all uranium fuel cycle production plants. Such appraisals are updated before any license is renewed,