a

GAO

United States General Accounting Office

Report to Congressional Requesters

May 2004 NUCLEAR 

REGULATION

NRC’s Liability 

Insurance 

Requirements for 

Nuclear Power Plants 

Owned by Limited 

Liability Companies

GAO-04-654
www.gao.gov/cgi-bin/getrpt?GAO-04-654.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Jim Wells at 

202-512-3841. 

Highlights of GAO-04-654, a report to 

congressional requesters 

May 2004

NUCLEAR REGULATION 

NRC’s Liability Insurance Requirements 

for Nuclear Power Plants Owned by 

Limited Liability Companies 

Of the 103 operating nuclear power plants, 31 are owned by 11 limited 

liability companies. Three energy corporations—Exelon, Entergy, and the 

Constellation Energy Group—are the parent companies for eight of these 

limited liability companies. These 8 subsidiaries are the licensees or colicensees for 27 of the 31 plants. 

NRC requires all licensees for nuclear power plants to show proof that they 

have the primary and secondary insurance coverage mandated by the PriceAnderson Act. Licensees obtain their primary insurance through American 

Nuclear Insurers. Licensees also sign an agreement with NRC to keep the 

insurance in effect. American Nuclear Insurers also has a contractual 

agreement with each of the licensees to collect the retrospective premiums if

these payments become necessary. A certified copy of this agreement, 

which is called a bond for payment of retrospective premiums, is provided to 

NRC as proof of secondary insurance. It obligates the licensee to pay the 

retrospective premiums to American Nuclear Insurers. 

NRC does not treat limited liability companies differently than other 

licensees with respect to the Price-Anderson Act’s insurance requirements. 

Like other licensees, limited liability companies must show proof of both 

primary and secondary insurance coverage. American Nuclear Insurers also 

requires limited liability companies to provide a letter of guarantee from 

their parent or other affiliated companies with sufficient assets to pay the 

retrospective premiums. These letters state that the parent or affiliated 

companies are responsible for paying the retrospective premiums if the 

limited liability company does not. American Nuclear Insurers informs NRC 

it has received these letters. In light of the increasing number of plants 

owned by limited liability companies, NRC is studying its existing 

regulations and expects to report on its findings by the end of summer 2004.

In commenting on a draft of this report, NRC stated that it accurately 

reflects the present insurance system for nuclear power plants. 

Source: NRC.

Aerial view of the Three Mile Island Nuclear Station in Pennsylvania, where the most serious 

accident at a U.S. nuclear power plant occurred in March 1979, resulting in $70 million in liability 

claims.

An accident at one the nation’s 

commercial nuclear power plants 

could result in human health and 

environmental damages. To ensure 

that funds would be available to 

settle liability claims in such cases, 

the Price-Anderson Act requires 

licensees for these plants to have 

primary insurance—currently $300 

million per site. The act also 

requires secondary coverage in the 

form of retrospective premiums to 

be contributed by all licensees to 

cover claims that exceed primary 

insurance. If these premiums are 

needed, each licensee’s payments 

are limited to $10 million per year 

and $95.8 million in total for each 

of its plants. In recent years, 

limited liability companies have 

increasingly become licensees of 

nuclear power plants, raising 

concerns about whether these 

companies—by shielding their 

parent corporations’ assets—will 

have the financial resources to pay 

their retrospective premiums. 

GAO was asked to determine (1) 

the extent to which limited liability 

companies are the licensees for 

U.S. commercial nuclear power 

plants, (2) the Nuclear Regulatory 

Commission’s (NRC) requirements 

and procedures for ensuring that 

licensees of nuclear power plants 

comply with the Price-Anderson 

Act’s liability requirements, and (3) 

whether and how these procedures 

differ for licensees that are limited 

liability companies. 
Page i GAO-04-654 Nuclear Regulation

Contents

Letter 1

Results in Brief 2

Background 4

Limited Liability Companies Are Licensees for 31 of the 103 

Operating Commercial Nuclear Power Plants in the United States 

6

NRC Has Specific Requirements and Procedures to Ensure That All 

Licensees Comply with the Price-Anderson Act’s Liability 

Provisions 7

NRC Treats Limited Liability Companies the Same as Other 

Licensees, but the Insurance Industry Has Added Important 

Requirements for These Companies 9

Agency Comments 10

Scope and Methodology 10

Appendixes

Appendix I: Nuclear Power Plant Ownership 14

Appendix II: Comments from the Nuclear Regulatory Commission 21

Table Table 1: Limited Liability Companies Licensed to Operate Nuclear 

Power Plants and Their Parent Companies 6

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Page 1 GAO-04-654 Nuclear Regulation

United States General Accounting Office

Washington, D.C. 20548

A

May 28, 2004 Letr

Congressional Requesters

An accident at one of the nation’s 1031 operating commercial nuclear power 

plants could result in human health and environmental damages. The PriceAnderson Act was enacted in 1957 to ensure that funds would be available 

for at least a portion of the damages suffered by the public in the event of 

an incident at a U.S. nuclear power plant. The act requires each licensee of 

a nuclear plant to have primary insurance coverage equal to the maximum 

amount of liability insurance available from private sources—currently 

$300 million—to settle any such claims against it. In the event of an 

accident at any plant where liability claims exceed the $300 million primary 

insurance coverage, the act also requires licensees for all plants to pay 

retrospective premiums (also referred to as secondary insurance). Under 

current U.S. Nuclear Regulatory Commission (NRC) regulations, these 

payments could amount to a maximum of $95.8 million for each of a 

licensee’s plants per incident. If claims for an incident exceed this 

approximately $10 billion currently available in primary insurance and 

retrospective premiums, NRC may request additional funds from the 

Congress. To operate a nuclear power plant, the owner must obtain a 

license from NRC and meet its regulatory requirements, including those for 

liability insurance established under the Price-Anderson Act.

A major aspect of the deregulation or restructuring of the U.S. electricity 

industry in the 1990s was the separation of electricity generation from 

transmission and distribution. Utilities could create separate entities or 

subsidiaries to operate their generation facilities, including nuclear power 

plants, or could sell them off to other companies. Energy holding 

companies bought some of the generation facilities, sometimes placing 

them under subsidiaries. The limited liability company also emerged in the 

1990s as a new type of company structure in the United States. These 

companies have characteristics of both a partnership and a corporation. 

Like a partnership, the profits are passed through and taxable to the 

owners, known as members; like a corporation, it is a separate and distinct 

legal entity and its owners are insulated from personal liability for its debts 

and liabilities.

1

Although 104 commercial nuclear power plants are licensed to operate in the United States, 

1 plant, Browns Ferry Unit 1, was shut down in 1985 and remains idle. 
Page 2 GAO-04-654 Nuclear Regulation

You asked us to determine (1) the extent to which limited liability 

companies are the licensees for U.S. commercial nuclear power plants, (2) 

NRC’s requirements and procedures for ensuring that licensees of nuclear 

power plants comply with the Price-Anderson Act’s liability requirements, 

and (3) whether and how these procedures differ for licensees that are 

limited liability companies. To respond to your request, we reviewed 

applicable sections of the Price-Anderson Act and NRC’s implementing 

regulations and written procedures. We also held discussions with and 

obtained information from responsible NRC officials and representatives of 

American Nuclear Insurers, which is a joint underwriting association of 50 

insurance companies that provides insurance coverage to the nuclear 

power plants. These are property/casualty insurance companies licensed to 

do business in at least one of the states or territories of the United States. 

We performed our work between April 2003 and April 2004 in accordance 

with generally accepted government auditing standards.

Results in Brief Thirty-one of the 103 operating commercial nuclear power plants 

nationwide are licensed to limited liability companies. Four of the 31 plants 

are licensed jointly to two limited liability companies. A total of 11 limited 

liability companies are licensed to own nuclear power plants. One—the 

Exelon Generation Company, LLC—is the licensee for 12 plants and colicensee for 4 plants. The 10 other limited liability companies are the 

licensees or co-licensees for one to five plants. Three energy 

corporations—Exelon, Entergy, and the Constellation Energy Group—are 

the parent companies for eight of the limited liability companies. These 

eight subsidiaries are the licensees or co-licensees for 27 of the 31 plants. 

NRC’s procedures for ensuring that licensees comply with Price-Anderson 

Act liability insurance provisions include requirements that licensees 

provide proof of primary and secondary insurance coverage. NRC requires 

each licensee to show proof that it has liability insurance that includes the 

$300 million of primary insurance coverage per site required by the PriceAnderson Act. NRC and the licensee also sign an indemnity agreement that 

requires the licensee to maintain an insurance policy in this amount. This 

agreement is in effect as long as the owner is licensed to operate the plant. 

NRC relies on American Nuclear Insurers—the joint underwriting 

association that provides insurance for U.S. nuclear power plants—to send 

NRC the annual endorsements documenting proof of insurance after the 

licensees have paid their annual premiums. In addition to the primary 

insurance coverage, licensees must also show proof of secondary 

insurance to NRC. This secondary insurance is in the form of retrospective 
Page 3 GAO-04-654 Nuclear Regulation

premiums that, in the event of a nuclear incident causing damages 

exceeding $300 million, would be collected from each nuclear power plant 

licensee at a rate of up to $10 million per year and up to a maximum of 

$95.8 million per incident for each nuclear power plant. Typically, each 

licensee signs a bond for payment of retrospective premiums as proof of 

the secondary insurance and furnishes NRC with a certified copy. This 

bond is a contractual agreement between the licensee and American 

Nuclear Insurers that obligates the licensee to pay American Nuclear 

Insurers the retrospective premiums. In the event that claims exhaust 

primary coverage, American Nuclear Insurers would collect the 

retrospective premiums. If a licensee did not pay its share of these 

retrospective premiums, American Nuclear Insurers would, under its 

agreement with the licensees, pay up to $30 million of the premiums in 1 

year and attempt to collect this amount later from the licensees.

NRC does not treat limited liability companies differently than other 

licensees of nuclear power plants with respect to Price-Anderson Act 

liability requirements. All licensees follow the same regulations and 

procedures regardless of whether they are limited liability companies. Like 

other licensees, limited liability companies are required to show that they 

are maintaining $300 million in primary insurance coverage, and they 

provide NRC a copy of the bond for payment of retrospective premiums. 

While NRC does not conduct in-depth financial reviews specifically to 

determine licensees’ ability to pay retrospective premiums, when a licensee 

applies for a license or when the license is transferred, NRC reviews the 

licensee’s financial ability to safely operate the plant and to contribute 

decommissioning funds for the future retirement of the plant. According to 

NRC officials, if licensees have the financial resources to cover these two 

expenses, they are likely to be capable of paying their retrospective 

premiums. American Nuclear Insurers goes further than NRC and requires 

limited liability companies to provide a letter of guarantee from their 

parent or other affiliated companies with sufficient assets to cover the 

retrospective premiums. These letters state that the parent or an affiliated 

company is responsible for paying the retrospective premiums if the 

limited liability company does not. American Nuclear Insurers informs 

NRC that it has received these letters of guarantee. Recognizing that 

limited liability companies are becoming more prevalent as owners of 

nuclear power plants, NRC is examining whether it needs to revise any of 

its regulations and procedures for these companies. NRC estimates the 

study will be completed by the end of summer 2004.
Page 4 GAO-04-654 Nuclear Regulation

In commenting on a draft of this report, NRC stated that it accurately 

reflects the present insurance system for nuclear power plants.

Background The Atomic Energy Act of 1954 authorized a comprehensive regulatory 

program to permit private industry to develop and apply atomic energy for 

peaceful uses, such as generating electricity from privately owned nuclear 

power plants. Soon thereafter, government and industry experts identified 

a major impediment to accomplishing the act’s objective: the potential for 

payment of damages resulting from a nuclear accident and the lack of 

adequate available insurance. Unwilling to risk huge financial liability, 

private companies viewed even the remote specter of a serious accident as 

a roadblock to their participating in the development and use of nuclear 

power.2

 In addition, congressional concern developed over ensuring 

adequate financial protection to the public because the public had no 

assurance that it would receive compensation for personal injury or 

property damages from the liable party in event of a serious accident. 

Faced with these concerns, the Congress enacted the Price-Anderson Act 

in September 1957. The Price-Anderson Act has two underlying objectives: 

(1) to establish a mechanism for compensating the public for personal 

injury or property damage in the event of a nuclear accident and (2) to 

encourage the development of nuclear power.

To provide financial protection, the Price-Anderson Act requires 

commercial nuclear reactors to be insured to the maximum level of 

primary insurance available from private insurers. To implement this 

provision, NRC periodically revises its regulations to require licensees of 

nuclear reactors to increase their coverage level as the private insurance 

market increases the maximum level of primary insurance that it is willing 

to offer. For example, in January 2003, NRC increased the required 

coverage from $200 million to the current $300 million, when American 

Nuclear Insurers informed NRC that $300 million per site in coverage was 

now available in its insurance pool. 

In 1975, the Price-Anderson Act was amended to require licensees to pay a 

pro-rated share of the damages in excess of the primary insurance amount. 

2

NRC’s regulations define a nuclear incident as any occurrence that causes bodily injury, 

sickness, disease, or death or loss of or damage to property or for loss of the use of property 

arising out of or resulting from the radioactive, toxic, explosive, or other hazardous 

properties of the source, special nuclear or byproduct material.
Page 5 GAO-04-654 Nuclear Regulation

Under this amendment, each licensee would pay up to $5 million in 

retrospective premiums per facility it owned per incident if a nuclear 

accident resulted in damages exceeding the amount of primary insurance 

coverage. In 1988, the act was further amended to increase the maximum 

retrospective premium to $63 million per reactor per incident to be 

adjusted by NRC for inflation. The amendment also limited the maximum 

annual retrospective premium per reactor to $10 million. Under the act, 

NRC is to adjust the maximum amount of retrospective premiums every 5 

years using the aggregate change in the Consumer Price Index for urban 

consumers. In August 2003, NRC set the current maximum retrospective 

payment at $95.8 million per reactor per incident. With 103 operating 

nuclear power plants, this secondary insurance pool would total about $10 

billion.3

The Price-Anderson Act also provides a process to deal with incidents in 

which the damages exceed the primary and secondary insurance coverage. 

Under the act, NRC shall survey the causes and extent of the damage and 

submit a report on the results to, among others, the Congress and the 

courts. The courts must determine whether public liability exceeds the 

liability limits available in the primary insurance and secondary 

retrospective premiums. Then the President would submit to the Congress 

an estimate of the financial extent of damages, recommendations for 

additional sources of funds, and one or more compensation plans for full 

and prompt compensation for all valid claims. In addition, NRC can request 

the Congress to appropriate funds. The most serious incident at a U.S. 

nuclear power plant took place in 1979 at the Three Mile Island Nuclear 

Station in Pennsylvania. That incident has resulted in $70 million in liability 

claims.

NRC’s regulatory activities include licensing nuclear reactors and 

overseeing their safe operation. Licensees must meet NRC regulations to 

obtain and retain their license to operate a nuclear facility. NRC carries out 

reviews of financial qualifications of reactor licensees when they apply for 

a license or if the license is transferred, including requiring applicants to 

demonstrate that they possess or have reasonable assurance of obtaining 

funds necessary to cover estimated operating costs for the period of the 

license. NRC does not systematically review its licensees’ financial 

qualifications once it has issued the license unless it has reason to believe 

3

NRC regulations also require licensees to maintain $1 billion in on-site property damage 

insurance to provide funds to deal with cleanup of the reactor site after an accident. 
Page 6 GAO-04-654 Nuclear Regulation

this is necessary. In addition, NRC performs inspections to verify that a 

licensee’s activities are properly conducted to ensure safe operations in 

accordance with NRC’s regulations. NRC can issue sanctions to licensees 

who violate its regulations. These sanctions include notices of violation; 

civil penalties of up to $100,000 per violation per day; and orders that may 

modify, suspend, or revoke a license.

Limited Liability 

Companies Are 

Licensees for 31 of the 

103 Operating 

Commercial Nuclear 

Power Plants in the 

United States

Thirty-one commercial nuclear power plants nationwide are licensed to 

limited liability companies. In total, 11 limited liability companies are 

licensed to own nuclear power plants. Three energy corporations—Exelon, 

Entergy, and the Constellation Energy Group—are the parent companies 

for 8 of these limited liability companies. These eight subsidiaries are 

licensed or co-licensed to operate 27 of the 31 plants. The two subsidiaries 

of the Exelon Corporation are the licensees for 15 plants and the colicensees for 4 others. Constellation Energy Group, Inc., and Entergy 

Corporation are the parent companies of limited liability companies that 

are licensees for four nuclear power plants each. (See table 1.) 

Table 1: Limited Liability Companies Licensed to Operate Nuclear Power Plants and Their Parent Companies

Source: GAO survey of NRC project managers.

Limited liability company Parent company

Number of plants 

owned or co-owned

Exelon Generation Company, LLC Exelon Corporation 12

AmerGen Energy Company, LLC Exelon Corporation 3

Exelon Generation Company, LLC; PSEG Nuclear, LLC Exelon Corporation; Public Service Enterprise 

Group, Incorporated

4

PSEG Nuclear, LLC Public Service Enterprise Group, Incorporated 1

Calvert Cliffs Nuclear Power Plant, LLC Constellation Energy Group, Inc. 2

Nine Mile Point Nuclear Station, LLC Constellation Energy Group, Inc. 2

Entergy Nuclear Indian Point 2, LLC Entergy Corporation 1

Entergy Nuclear Indian Point 3, LLC Entergy Corporation 1

Entergy Nuclear FitzPatrick, LLC Entergy Corporation 1

Entergy Nuclear Vermont Yankee, LLC Entergy Corporation 1

FPL Energy Seabrook, LLC FPL Group, Inc. 1

PPL Susquehanna, LLC Pennsylvania Power and Light Company 2
Page 7 GAO-04-654 Nuclear Regulation

Of all the limited liability companies, Exelon Generation Company, LLC, 

has the largest number of plants. It is the licensee for 12 plants and colicensee with PSEG Nuclear, LLC, for 4 other plants. For these 4 plants, 

Exelon Generation owns 43 percent of Salem Nuclear Generating Stations 

1 and 2 and 50 percent of Peach Bottom Atomic Power Stations 2 and 3. 

(App. I lists all the licensees and their nuclear power plants.) 

NRC Has Specific 

Requirements and 

Procedures to Ensure 

That All Licensees 

Comply with the PriceAnderson Act’s 

Liability Provisions 

NRC requires licensees of nuclear power plants to comply with the PriceAnderson Act’s liability insurance provisions by maintaining the necessary 

primary and secondary insurance coverage. First, NRC ensures that 

licensees comply with the primary insurance coverage requirement by 

requiring them to submit proof of coverage in the amount of $300 million. 

Second, NRC ensures compliance with the requirement for secondary 

coverage by accepting the certified copy of the licensee’s bond for payment 

of retrospective premiums. 

All the nuclear power plant licensees purchase their primary insurance 

from American Nuclear Insurers. American Nuclear Insurers sends NRC 

annual endorsements documenting proof of primary insurance after the 

licensees have paid their annual premiums. NRC and each licensee also 

sign an indemnity agreement, stating that the licensee will maintain an 

insurance policy in the required amount. This agreement, which is in effect 

as long as the owner is licensed to operate the plant, guarantees 

reimbursement of liability claims against the licensee in the event of a 

nuclear incident through the liability insurance. The agency can suspend or 

revoke the license if a licensee does not maintain the insurance, but 

according to an NRC official, no licensee has ever failed to pay its annual 

primary insurance premium and American Nuclear Insurers would notify 

NRC if a licensee failed to pay.4

 

As proof of their secondary insurance coverage, licensees must provide 

evidence that they are maintaining a guarantee of payment of retrospective 

premiums. Under NRC regulations, the licensee must provide NRC with 

evidence that it maintains one of the following six types of guarantees: (1) 

surety bond, (2) letter of credit, (3) revolving credit/term loan arrangement, 

(4) maintenance of escrow deposits of government securities, (5) annual 

4

The average annual premium for a single nuclear power plant at a site is about $400,000. 

The premium for a second or third plant at the same site is discounted because the 

maximum amount of primary insurance for a multi-plant site is $300 million.
Page 8 GAO-04-654 Nuclear Regulation

certified financial statement showing either that a cash flow can be 

generated and would be available for payment of retrospective premiums 

within 3 months after submission of the statement or a cash reserve or 

combination of these, or (6) such other type of guarantee as may be 

approved by the Commission.

Before the late 1990s, the licensees provided financial statements to NRC 

as evidence of their ability to pay retrospective premiums.5

 According to 

NRC officials, in the late 1990s, Entergy asked NRC to accept the bond for 

payment of retrospective premiums that it had with American Nuclear 

Insurers as complying with the sixth option under NRC’s regulations: such 

other type of guarantee as may be approved by the Commission. After 

reviewing and agreeing to Entergy’s request, NRC decided to accept the 

bond from all the licensees as meeting NRC’s requirements. NRC officials 

told us that they did not document this decision with Commission papers 

or incorporate it into the regulations because they did not view this as 

necessary under the regulations.

The bond for payment of retrospective premiums is a contractual 

agreement between the licensee and American Nuclear Insurers that 

obligates the licensee to pay American Nuclear Insurers the retrospective 

premiums. Each licensee signs this bond and furnishes NRC with a 

certified copy. In the event that claims exhaust primary coverage, American 

Nuclear Insurers would collect the retrospective premiums. If a licensee 

were not to pay its share of these retrospective premiums, American 

Nuclear Insurers would, under its agreement with the licensees, pay for up 

to three defaults or up to $30 million in 1 year of the premiums and attempt 

to collect this amount later from the defaulting licensees. According to an 

American Nuclear Insurers official, any additional defaults would reduce 

the amount available for retrospective payments. An American Nuclear 

Insurers official told us that his organization believes that the bond for 

payment of retrospective premiums is legally binding and obligates the 

licensee to pay the premium. Under NRC regulations, if a licensee fails to 

pay the assessed deferred premium, NRC reserves the right to pay those 

premiums on behalf of the licensee and recover the amount of such 

premiums from the licensee.

5

Fifteen licensees continue to provide financial statements to NRC.
Page 9 GAO-04-654 Nuclear Regulation

NRC Treats Limited 

Liability Companies 

the Same as Other 

Licensees, but the 

Insurance Industry Has 

Added Important 

Requirements for 

These Companies 

NRC applies the same rules to limited liability companies that it does to 

other licensees of nuclear power plants with respect to liability 

requirements under the Price-Anderson Act.

All licensees must meet the same requirements regardless of whether they 

are limited liability companies. American Nuclear Insurers applies an 

additional requirement for limited liability companies with respect to 

secondary insurance coverage in order to ensure that they have sufficient 

assets to pay retrospective premiums. Given the growing number of 

nuclear power plants licensed to limited liability companies, NRC is 

examining the need to revise its procedures and regulations for such 

companies.

NRC requires all licensees of nuclear power plants to follow the same 

regulations and procedures. Limited liability companies, like other 

licensees, are required to show that they are maintaining the $300 million in 

primary insurance coverage and provide NRC a copy of the bond for 

payment of retrospective premiums or other approved evidence of 

guarantee of retrospective premium payments. According to NRC officials, 

all its licensees, including those that are limited liability companies, have 

sufficient assets to cover the retrospective premiums. While NRC does not 

conduct in-depth financial reviews specifically to determine licensees’ 

ability to pay retrospective premiums, it reviews the licensees’ financial 

ability to safely operate their plants and to contribute decommissioning 

funds for the future retirement of the plants. According to NRC officials, if 

licensees have the financial resources to cover these two larger expenses, 

they are likely to be capable of paying their retrospective premiums. 

American Nuclear Insurers goes further than NRC and requires licensees 

that are limited liability companies to provide a letter of guarantee from 

their parent or other affiliated companies with sufficient assets to cover the 

retrospective premiums. An American Nuclear Insurers official stated that 

American Nuclear Insurers obtains these letters as a matter of good 

business practice. These letters state that the parent or an affiliated 

company is responsible for paying the retrospective premiums if the 

limited liability company does not. If the parent company or other affiliated 

company of a limited liability company does not provide a letter of 

guarantee, American Nuclear Insurers could refuse to issue the bond for 

payment of retrospective premiums and the company would have to have 

another means to show NRC proof of secondary insurance. American 

Nuclear Insurers informs NRC that it has received these letters of 
Page 10 GAO-04-654 Nuclear Regulation

guarantee. The official also told us that American Nuclear Insurers believes 

that the letters from the parent companies or other affiliated companies of 

the limited liability company licensed by NRC are valid and legally 

enforceable contracts.

NRC officials told us that they were not aware of any problems caused by 

limited liability companies owning nuclear power plants and that NRC 

currently does not regard limited liability companies’ ownership of nuclear 

power plants as a concern. However, because these companies are 

becoming more prevalent as owners of nuclear power plants, NRC is 

examining whether it needs to revise any of its regulations or procedures 

for these licensees. NRC estimates that it will complete its study by the end 

of summer 2004.

Agency Comments We provided a draft of this report to NRC for review and comment. In its 

written comments (see app. II), NRC stated that it believes the report 

accurately reflects the present insurance system for nuclear power plants. 

NRC said that we correctly conclude that the agency does not treat limited 

liability companies differently than other licensees with respect to PriceAnderson’s insurance requirements. NRC also stated that we are correct in 

noting that it is not aware of any problems caused by limited liability 

companies owning nuclear power plants and that NRC currently does not 

regard limited liability companies’ ownership of nuclear power plants as a 

concern. In addition, NRC commented that we agree with the agency’s 

conclusion that all its reactor licensees have sufficient assets that they are 

likely to be able to pay the retrospective premiums. With respect to this last 

comment, the report does not take a position on the licensees’ ability to pay 

the retrospective premiums. We did not evaluate the sufficiency of the 

individual licensees’ assets to make these payments. Instead, we reviewed 

NRC’s and the American Nuclear Insurers’ requirements and procedures 

for retrospective premiums.

Scope and 

Methodology

We performed our review at NRC headquarters in Washington, D.C. We 

reviewed statutes, regulations, and appropriate guidance as well as 

interviewed agency officials to determine the relevant statutory framework 

of the Price-Anderson Act. To determine the number of nuclear power 

plant licensees that are limited liability companies, we surveyed, through 

electronic mail, all the NRC project managers responsible for maintaining 

nuclear power plant licenses. We asked them to provide data on the 
Page 11 GAO-04-654 Nuclear Regulation

licensees, including the licensee’s name and whether it was a limited 

liability company. If it was a limited liability company, we asked when the 

license was transferred to the limited liability company and who is the 

parent company of the limited liability company. We received responses for 

all 103 nuclear power plants currently licensed to operate. We analyzed the 

results of the survey responses. We verified the reliability of the data from a 

random sample of project managers by requesting copies of the power 

plant licenses and then comparing the power plant licenses to the data 

provided by the project managers. The data agreed in all cases. We 

concluded that the data were reliable enough for the purposes of this 

report.

To determine NRC’s requirements for ensuring that licensees of nuclear 

power plants comply with the Price-Anderson Act’s liability requirements, 

we reviewed relevant statutes and NRC regulations and interviewed NRC 

officials responsible for ensuring that licensees have primary and 

secondary insurance coverage. We also spoke with American Nuclear 

Insurers officials responsible for issuing the insurance coverage to nuclear 

power plant licensees, and we reviewed relevant documents associated 

with the insurance. To determine whether and how these procedures differ 

for licensees that are limited liability companies, we reviewed relevant 

documents, including NRC regulations, and interviewed NRC officials 

responsible for ensuring licensee compliance with Price-Anderson Act 

requirements.

As agreed with your offices, unless you publicly announce its contents 

earlier, we plan no further distribution of this report until 7 days from the 

date of this letter. We will then send copies to interested congressional 

committees; the Commissioners, Nuclear Regulatory Commission; the 

Director, Office of Management and Budget; and other interested parties. 

We will make copies available to others on request. In addition, the report 

will be available at no charge on GAO’s Web site at http://www.gao.gov.
Page 12 GAO-04-654 Nuclear Regulation

If you or your staff have any questions about this report, I can be reached at 

(202) 512-3841. Major contributors to this report include Ray Smith, Ilene 

Pollack, and Amy Webbink. John Delicath and Judy Pagano also 

contributed to this report.

Jim Wells

Director, Natural Resources 

and Environment
Page 13 GAO-04-654 Nuclear Regulation

List of Congressional Requesters

The Honorable Hillary Rodham Clinton

The Honorable James M. Jeffords

The Honorable Harry Reid

United States Senate
Page 14 GAO-04-654 Nuclear Regulation

Appendix I

Nuclear Power Plant Ownership ApApenednxidexiIs

Plant Licensed to own LLC

License 

transfer date LLC parent company

1 Arkansas Nuclear One 1 Entergy Arkansas, Inc. No

2 Arkansas Nuclear One 2 Entergy Arkansas, Inc. No

3 Arnold (Duane) Energy 

Center

Interstate Power and Light No

Central Iowa Power Cooperative No

Corn Belt Power Cooperative No

4 Beaver Valley Power Station 

1

Pennsylvania Power Company No

Ohio Edison Company No

FirstEnergy Nuclear Operating Company No

5 Beaver Valley Power Station 

2

Pennsylvania Power Company No

Ohio Edison Company No

Cleveland Electric Illuminating Company No

Toledo Edison Company No

FirstEnergy Nuclear Operating Company No

6 Braidwood Station 1 Exelon Generation Company, LLC Yes 1/12/2001 Exelon Corporation

7 Braidwood Station 2 Exelon Generation Company, LLC Yes 1/12/2001 Exelon Corporation

8 Browns Ferry Nuclear 

Power Station 1

Tennessee Valley Authority No

9 Browns Ferry Nuclear 

Power Station 2

Tennessee Valley Authority No

10 Browns Ferry Nuclear 

Power Station 3

Tennessee Valley Authority No

11 Brunswick Steam Electric 

Plant 1 

Carolina Power & Light Co. No

North Carolina Eastern Municipal Power 

Agency

No

12 Brunswick Steam Electric 

Plant 2

Carolina Power & Light Co. No

North Carolina Eastern Municipal Power 

Agency

No

13 Byron Station 1 Exelon Generation Company, LLC Yes 1/12/2001 Exelon Corporation

14 Byron Station 2 Exelon Generation Company, LLC Yes 1/12/2001 Exelon Corporation

15 Callaway Plant Union Electric Company No

16 Calvert Cliffs Nuclear Power 

Plant 1

Calvert Cliffs Nuclear Power Plant, LLC Yes 6/19/2001 Constellation Energy Group, 

Inc.
Appendix I

Nuclear Power Plant Ownership

Page 15 GAO-04-654 Nuclear Regulation

17 Calvert Cliffs Nuclear Power 

Plant 2

Calvert Cliffs Nuclear Power Plant, LLC Yes 6/19/2001 Constellation Energy Group, 

Inc.

18 Catawba Nuclear Station 1 North Carolina Electric Membership 

Corp.

No

Saluda River Electric Cooperative, Inc. No

Duke Energy Corporation No

19 Catawba Nuclear Station 2 North Carolina Municipal Power Agency 

No. 1

No

Piedmont Municipal Power Agency No

20 Clinton Power Station AmerGen Energy Company, LLC Yes 11/24/1999 Exelon Corporation

21 Columbia Generation 

Station

Energy Northwest No

22 Comanche Peak Steam 

Electric Station 1

TXU Generation Company LP No

23 Comanche Peak Steam 

Electric Station 2

TXU Generation Company LP No

24 Cook (Donald C.) Nuclear 

Power Plant 1

Indiana Michigan Power Company No

25 Cook (Donald C.) Nuclear 

Power Plant 2

Indiana Michigan Power Company No

26 Cooper Nuclear Station Nebraska Public Power District No

27 Crystal River Nuclear Plant 

3

Florida Power Corporation No

City of Alachua No

City of Bushnell No

City of Gainesville No

City of Kissimmee No

City of Leesburg No

City of New Smyrna Beach and Utilities 

Commission

No

City of Ocala No

Orlando Utilities Commission and City of 

Orlando

No

Seminole Electric Cooperative, Inc. No

28 Davis-Besse Nuclear Power 

Station

Cleveland Electric Illumination Company No

Toledo Edison Company No

29 Diablo Canyon Nuclear 

Power Plant 1

Pacific Gas and Electric Company No

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transfer date LLC parent company
Appendix I

Nuclear Power Plant Ownership

Page 16 GAO-04-654 Nuclear Regulation

30 Diablo Canyon Nuclear 

Power Plant 2

Pacific Gas and Electric Company No

31 Dresden Nuclear Power 

Station 2

Exelon Generation Company, LLC Yes 8/3/2000 Exelon Corporation

32 Dresden Nuclear Power 

Station 3

Exelon Generation Company, LLC Yes 8/3/2000 Exelon Corporation

33 Farley (Joseph M.) Nuclear 

Plant 1

Alabama Power Company No

34 Farley (Joseph M.) Nuclear 

Plant 2

Alabama Power Company No

35 Fermi (Enrico) Atomic 

Power Plant 2

Detroit Edison Company No

36 FitzPatrick (James A.) 

Nuclear Power Plant

Entergy Nuclear FitzPatrick, LLC Yes 11/21/2000 Entergy Corporation

37 Fort Calhoun Station Omaha Public Power District No

38 Ginna (Robert E.) Nuclear 

Station

Rochester Gas and Electric Corporation No

39 Grand Gulf Nuclear Station System Energy Resources, Inc. No

South Mississippi Electric Power Assoc. No

40 Harris (Shearon) Nuclear 

Power Plant

Carolina Power & Light Co. No

North Carolina Eastern Municipal Power 

Agency

No

41 Hatch (Edwin I.) Nuclear 

Plant 1

Georgia Power Company No

Municipal Electric Authority of Georgia No

Oglethorpe Power Corporation No

City of Dalton, Georgia No

42 Hatch (Edwin I.) Nuclear 

Plant 2

Georgia Power Company No

Municipal Electric Authority of Georgia No

Oglethorpe Power Corporation No

City of Dalton, Georgia No

43 Hope Creek Nuclear Power 

Station

PSEG Nuclear, LLC Yes 8/21/2000; 

10/18/2001

Public Service Enterprise 

Group, Incorporated

44 Indian Point 2 Entergy Nuclear Indian Point 2, LLC Yes 9/6/2001 Entergy Corporation

45 Indian Point 3 Entergy Nuclear Indian Point 3, LLC Yes 11/21/2000 Entergy Corporation

46 Kewaunee Nuclear Power 

Plant

Wisconsin Public Service Corp. No

Wisconsin Power & Light Company No

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Appendix I

Nuclear Power Plant Ownership

Page 17 GAO-04-654 Nuclear Regulation

47 LaSalle County Station 1 Exelon Generation Company, LLC Yes 1/12/2001 Exelon Corporation

48 LaSalle County Station 2 Exelon Generation Company, LLC Yes 1/12/2001 Exelon Corporation

49 Limerick Generating Station 

1

Exelon Generation Company, LLC Yes 1/12/2001 Exelon Corporation

50 Limerick Generating Station 

2

Exelon Generation Company, LLC Yes 1/12/2001 Exelon Corporation

51 McGuire (William B.) 

Nuclear Station 1

Duke Energy Corporation No

52 McGuire (William B.) 

Nuclear Station 2

Duke Energy Corporation No

53 Millstone Nuclear Power 

Station 2

Dominion Nuclear Connecticut, Inc. No

54 Millstone Nuclear Power 

Station 3

Dominion Nuclear Connecticut, Inc. No

Central Vermont Public Service 

Corporation

No

Massachusetts Municipal Wholesale 

Electric Co.

No

55 Monticello Nuclear 

Generating Plant

Northern States Power Company No

56 Nine Mile Point Nuclear 

Station 1

Nine Mile Point Nuclear Station, LLC Yes 11/7/2001 Constellation Energy Group

57 Nine Mile Point Nuclear 

Station 2

Nine Mile Point Nuclear Station, LLC Yes 11/7/2001 Constellation Energy Group

Long Island Lighting Company No

58 North Anna Power Station 1 Virginia Electric and Power Company No

Old Dominion Electric Cooperative No

59 North Anna Power Station 2 Virginia Electric and Power Company No

Old Dominion Electric Cooperative No

60 Oconee Nuclear Station 1 Duke Energy Corporation No

61 Oconee Nuclear Station 2 Duke Energy Corporation No

62 Oconee Nuclear Station 3 Duke Energy Corporation No

63 Oyster Creek Nuclear 

Power Plant

AmerGen Energy Company, LLC Yes 8/8/2000 Exelon Corporation

64 Palisades Nuclear Plant Consumers Energy Company No

65 Palo Verde Nuclear 

Generating Station 1

Arizona Public Service Company No

Salt River Project Agricultural 

Improvement and Power District

No

El Paso Electric Company No

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Appendix I

Nuclear Power Plant Ownership

Page 18 GAO-04-654 Nuclear Regulation

Southern California Edison Company No

Public Service Company of New Mexico No

Los Angeles Dept. of Water and Power No

Southern California Public Power 

Authority

No

66 Palo Verde Nuclear 

Generating Station 2

Arizona Public Service Company No

Salt River Project Agricultural 

Improvement and Power District

No

El Paso Electric Company No

Southern California Edison Company No

Public Service Company of New Mexico No

Los Angeles Dept. of Water and Power No

Southern California Public Power 

Authority

No

67 Palo Verde Nuclear 

Generating Station 3

Arizona Public Service Company No

Salt River Project Agricultural 

Improvement and Power District

No

El Paso Electric Company No

Southern California Edison Company No

Public Service Company of New Mexico No

Los Angeles Dept. of Water and Power No

Southern California Public Power 

Authority

No

68 Peach Bottom Atomic 

Power Station 2 

Exelon Generation Company, LLC Yes 1/12/2001 Exelon Corporation

PSEG Nuclear, LLC Yes Public Service Enterprise 

Group, Incorporated

69 Peach Bottom Atomic 

Power Station 3

Exelon Generation Company, LLC Yes 1/12/2001 Exelon Corporation

PSEG Nuclear, LLC Yes Public Service Enterprise 

Group, Incorporated

70 Perry Nuclear Power Plant Ohio Edison Company No

Cleveland Electric Company No

Toledo Edison Company No

71 Pilgrim Station Entergy Nuclear Generation Co. No

72 Point Beach Nuclear Plant 1 Wisconsin Electric Power Company No

73 Point Beach Nuclear Plant 2 Wisconsin Electric Power Company No

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Appendix I

Nuclear Power Plant Ownership

Page 19 GAO-04-654 Nuclear Regulation

74 Praire Island Nuclear Plant 

1

Northern States Power Company No

75 Praire Island Nuclear Plant 

2

Northern States Power Company No

76 Quad Cities Station 1 Exelon Generation Company, LLC Yes 8/3/2000 Exelon Corporation

MidAmerican Energy Company No

77 Quad Cities Station 2 Exelon Generation Company, LLC Yes 8/3/2000 Exelon Corporation

MidAmerican Energy Company No

78 River Bend Station Entergy Gulf States, Inc. No

79 Robinson (H. B.) Plant 2 Carolina Power & Light Co. No

80 Salem Nuclear Generating 

Station 1

PSEG Nuclear, LLC Yes 8/21/2000 Public Service Enterprise 

Group, Incorporated

Exelon Generation Company, LLC Yes 1/12/2001 Exelon Corporation

81 Salem Nuclear Generating 

Station 2

PSEG Nuclear, LLC Yes 8/21/2000 Public Service Enterprise 

Group, Incorporated

Exelon Generation Company, LLC Yes 1/12/2001 Exelon Corporation

82 San Onofre Nuclear 

Generating Station 2

Southern California Edison Company No

83 San Onofre Nuclear 

Generating Station 3

Southern California Edison Company No

84 Seabrook Nuclear Power 

Station

FPL Energy Seabrook, LLC Yes 11/1/2002 FPL Group, Inc.

Massachusetts Municipal Wholesale 

Electric Co.

No

Tauton Municipal Lighting Plant No

Hudson Light & Power Department No

85 Sequoya Nuclear Plant 1 Tennessee Valley Authority No

86 Sequoya Nuclear Plant 2 Tennessee Valley Authority No

87 South Texas Project 1 Texas Genco, LP No

City Public Service Board of San 

Antonio

No

Central Power & Light Company No

City of Austin, Texas No

88 South Texas Project 2 Texas Genco, LP No

City Public Service Board of San 

Antonio

No

Central Power & Light Company No

City of Austin, Texas No

89 St. Lucie Plant 1 Florida Power and Light Company No

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Appendix I

Nuclear Power Plant Ownership

Page 20 GAO-04-654 Nuclear Regulation

Source: GAO survey of NRC Project Managers.

90 St. Lucie Plant 2 Florida Power and Light Company No

Florida Municipal Power Agency No

Orlando Utilities Commission No

91 Summer (Virgil C.) Nuclear 

Station

South Carolina Electric & Gas Company No

South Carolina Public Service Authority No

92 Surry Power Station 1 Virginia Electric and Power Company No

93 Surry Power Station 2 Virginia Electric and Power Company No

94 Susquehanna Steam 

Electric Station 1

PPL Susquehanna, LLC Yes 6/1/2000 Pennsylvania Power and Light 

Company

95 Susquehanna Steam 

Electric Station 2

PPL Susquehanna, LLC Yes 6/1/2000 Pennsylvania Power and Light 

Company

96 Three Mile Island Nuclear 

Station 1

AmerGen Energy Company, LLC Yes 12/20/1999 Exelon Corporation

97 Turkey Point Station 3 Florida Power and Light Company No

98 Turkey Point Station 4 Florida Power and Light Company No

99 Vermont Yankee Nuclear 

Power Station

Entergy Nuclear Vermont Yankee, LLC Yes 7/1/2002 Entergy Corporation

Entergy Nuclear Operations, Inc. No

100 Vogtle (Alvin W.) Nuclear 

Plant 1 

Georgia Power Company No

Municipal Electric Authority of Georgia No

Oglethorpe Power Corporation No

City of Dalton, Georgia No

101 Vogtle (Alvin W.) Nuclear 

Plant 2

Georgia Power Company No

Municipal Electric Authority of Georgia No

Oglethorpe Power Corporation No

City of Dalton, Georgia No

102 Waterford Generating 

Station 3

Entergy Operations, Inc. No

103 Watts Bar Nuclear Plant 1 Tennessee Valley Authority No

104 Wolf Creek Generating 

Station

Kansas Gas & Electric Company No

Kansas City Power & Light Company No

Kansas Electric Power Cooperative, Inc. No

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Page 21 GAO-04-654 Nuclear Regulation

Appendix II

Comments from the Nuclear Regulatory 

Commission ApendxiI

(360330)
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