A General Accounting Office report charges that a Department of Energy plan to build and install the Clinch River breeder reactor's steam generators before testing a prototype is hazardous and financially risky and should be dropped.

According to a GAO investigator, DOE adopted the plan "largely on the basis of advice from a 'blue ribbon panel' consisting of four potential bidders on contracts for the steam generators and a nuclear consultant."

The report deals a possibly fatal blow to White House and nuclear industry hopes for the controversial, multibillion-dollar Tennessee project, which was intended to demonstrate the practicality of a reactor that produces more nuclear fuel than it burns. The generators would create the steam that drives the reactor's turbines by transferring heat from its coolant--volatile liquid sodium--to water.

The report is signed by Comptroller General Charles A. Bowsher, who said that the GAO, a congressional watchdog agency, had discussed its information "with responsible DOE officials to ensure accuracy," and warned:

"Small breeder reactors in this country and demonstration breeder reactors in foreign countries have experienced steam generator failures. Steam generators for the CRBR have also experienced a number of problems during their development. Despite that history, DOE does not plan to conduct complete and thorough tests of the steam generator design to be used in the CRBR."

Instead, he said, the department plans limited tests on a steam generator "which differs significantly from those designed for use" at Clinch River, a vibration test on a one-third scale model steam generator, and some in-plant testing after all generators have been built.

"Without conducting more thorough tests," Bowsher wrote, "DOE is assuming that all the units will operate as predicted." If DOE is right, the reactor will proceed on schedule and save money on testing, he said. "If DOE is wrong, the costs and delays associated with redesigning and modifying or rebuilding the CRBR steam generators would be substantial."

In the 1970s, Bowsher wrote, non-sodium steam generators caused 21 percent of the breakdowns in 33 of 45 nuclear plants in the United States. Yet Clinch River would be "a more difficult challenge" because its sodium steam generators would "impose severe mechanical stresses on the metal barrier between sodium and water," he said. "Even a small failure allowing contact between the two fluids raises the possibility of a fire or explosion . . . ."

The report recalled that the now-closed Enrico Fermi breeder near Detroit failed in 1962 "when vibrations and other problems created holes in the metal tubing, allowing contact between the sodium and the water."

"Similar problems delayed full power operations at the British demonstration breeder plant when four of nine steam generators leaked," Bowsher wrote, and only last month "the French demonstration breeder reactor was shut down because two sodium leaks in a steam generator caused a fire."

Even Atomics International, the company fabricating the prototype steam generator for Clinch River, "maintains that problems have been experienced in all cases where the steam generator design has not been thoroughly tested," Bowsher said.

In a May 18 letter to DOE Secretary James B. Edwards, Bowsher suggested that DOE delay its plans to award a construction contract for 10 steam generators until it gets the report, which was delivered yesterday.

DOE contends that the need to develop new energy sources makes construction of Clinch River urgent, and thorough testing of a steam generator prototype could delay the project needlessly by as much as 45 months, until 1986.

But Bowsher wrote that "the highly critical nature of the steam generator to overall CRBR success makes a strong argument for taking a cautious, conservative, and prudent approach . . . " And in a separate draft study, the GAO says that development of other energy sources may eliminate the need for breeder reactors and that DOE's own projections question the need for hurrying Clinch River.

The report said that DOE will require the successful bidder to conform to the Westinghouse Electric design, but will not require the company to guarantee the generators will work. If they do not work, the report pointed out, "the government would have to assume the additional costs of amending the design and reworking the steam generators because the design has not been guaranteed by Westinghouse, the lead reactor manufacturer."

Rep. John D. Dingell (D-Mich.), who requested the report as chairman of the House Energy and Commerce subcommittee on oversight and investigations, said:

"It is outrageous that DOE is taking advice on technical risks from potential contractors who then refuse to warrant either the design or the performance of the steam generators they would construct."

The government has spent about $1 billion on Clinch River although, in Dingell's words, "there isn't even a hole in the ground" to show for it. The project's cost estimate in 1972 was $669 million; today it is as high as $5 billion. The completion date predicted in 1973 was 1979; now it is as late as 1994.

President Carter tried to kill the project. While a congressman in 1978, Office of Management and Budget Director David A. Stockman called it "a technological turkey." Dingell's subcommittee staff investigators rated it a management fiasco.

The administration is seeking $252.5 million to fund Clinch River in fiscal 1983, and it has unrelenting support of Senate Majority Leader Howard H. Baker Jr. (R-Tenn.) and other Tennessee legislators. But opponents--many of them Republicans--hope to defeat the request. Last November, a Senate bill to cripple the project lost by only two votes. On May 17, for the second time in 10 weeks, the Nuclear Regulatory Commission rejected an administration bid for waivers of normal licensing requirements to speed up construction.