Company: TVC
Filing Date: 2025-02-05
Form Type: 10-Q
Source: 0001376986-25-000011
Chunk: 197

Company: Tennessee Valley Authority
Filing Date: 2025-02-05
Form: 10-Q
Item: Part II, Item 2
Chunk 197
---
 recorded as research and development expense, which is reflected as Operating and maintenance expense on TVA's Consolidated Statement of Operations in the period incurred.  TVA recorded $7 million and $9 million of expenses related to this agreement for the three months ended December 31, 2024 and the three months ended December 31, 2023, respectively.  TVA also had a $6 million letter of credit posted under this arrangement at December 31, 2024.

37

 20.  Contingencies and Legal Proceedings 

Contingencies Nuclear Insurance.  Section 170 of the Atomic Energy Act, commonly known as the Price-Anderson Act, provides a layered framework of financial protection to compensate for liability claims of members of the public for personal injury and property damages arising from a nuclear incident in the U.S.  This financial protection consists of two layers of coverage.  The primary level is private insurance underwritten by American Nuclear Insurers and provides public liability insurance coverage of $500 million for each nuclear power plant licensed to operate.  If this amount is not sufficient to cover claims arising from a nuclear incident, the second level, Secondary Financial Protection, applies. Within the Secondary Financial Protection level, the licensee of each nuclear reactor has a contingent obligation to pay a retrospective premium, equal to its proportionate share of the loss in excess of the primary level, regardless of proximity to the incident of fault, up to a maximum of approximately $166 million per reactor per incident.  With TVA's seven reactors, the maximum total contingent obligation per incident is $1.2 billion.  This retrospective premium is payable at a maximum rate currently set at approximately $25 million per year per nuclear incident per reactor.  Currently, 95 reactors are participating in the Secondary Financial Protection program.In the event that a nuclear incident results in public liability claims, the primary level provided by American Nuclear Insurers combined with the Secondary Financial Protection should provide up to $16.3 billion in coverage. Federal law requires that each Nuclear Regulatory Commission ("NRC") power reactor licensee obtain property insurance from private sources to cover the cost of stabilizing and decontaminating a reactor and its station site after an accident.  TVA carries property, decommissioning liability, and decontamination liability insurance from Nuclear Electric Insurance Limited ("NEIL") and European Mutual Association for Nuclear Insurance.  The limits available for a loss are up to $2.1 billion for two of TVA's