A Senate subcommittee yesterday tried again, unsuccessfully, to find out precisely where the buck would stop in the event of bankruptcy at Metropolitan Edison Corp., owner of the Three Mile Island nuclear power plant.
A bankruptcy or reorganization would cause "a hell of a mess" in litigation among Met Ed's creditors, rate-payers and bondholders, according to Philip A. Lomis, a member of the Securities and Exchange Commission. Not only would it rock the financial community as the nation's first major utility failure, but taxpayers might wind up paying to have the Nuclear Regulatory Commission take over running the damaged plant.
Sen. Gary Hart (D-Colo.), chairman of the nuclear regulation subcommittee, tried for the second day to get Met Ed's parent company, General Public Utilities Corp., to promise to run Three Mile Island if Met Ed should fold.
Again the response was conditional. "We do intend to the best of our ability to maintain our responsibilities at Three Mile Island," said GPU treasurer John Graham. Everything depends, he said, on whether the Pennsylvania Utilities Commission grants what he called "adequate and timely" increases in the rates Pennsylvania residents pay for their electricity.
"I want to get a straight answer from GPU at the earliest possible opportunity," Hart said. Pressed, Graham repeated that, "with adequate rate-making," GPU would continue running the crippled utility, but added, "If there were an outright rejection [of the rate increase request], it would be difficult to know all the ramifications of where Met Ed would go."
Loomis testified that GPU's $4.6 billion in assets give it "ample funds and earnings" to absorb a possible $100 million in Three Mile Island cleanup costs "without any kind of threat to the company's fiscal health."
The $100 million represents the difference between Met Ed's $300 million insurance for property damage and the estimated $400 million cleanup bill resulting from the March 28 accident at the TMI plant.
However, Loomis added, there would be "a lot of litigation" among rate-payers who want the plant to continue operating, creditors who supply things like fuel and water, and investors who expect to earn dividends on the $500 million in Met Ed bonds they hold.
When Penn Central died, its trustees opted to keep the railroad running at a loss, disregarding the howls of anguish from its backers, Loomis explained after the hearing. The bankruptcy laws were changed later to strengthen the position of bondholders to the point that the courts might have to decide which is stronger, Met Ed's bondholders' claim to any money coming in and the demand of the public to have their electricity supply continue.
"Of course if there's no electricity, then no one pays bills and there's no revenue," Loomis said. "It's a hell of a mess."
If GPU fails to pick up the tab, the buck would pass to the NRC, Hart observed. NRC Chairman Joseph M. Hendrie told him, "If there's an urgent need, why, we do what we have to do."
Hart complained that NRC plans to clean up TMI were "vague as hell . . . very, very frustrating." He said residents near the plant were "being driven batty" by uncertainty, and he asked the commission to outline a plan for him within 30 days.