Syracuse June 2004 “ RETS – REMP WORKSHOP 2004” Nuclear Liability Insurance Performance Indicators Nuclear Liability Insurance Performance Indicators for for Nuclear Power Plant Effluent Releases Nuclear Power Plant Effluent Releases William Wendland, P.E. American Nuclear Insurers Glastonbury, Connecticut USA AMERICAN NUCLEAR INSURERS Overview Overview � Background on Nuclear Liability Insurance Risk � Background on Nuclear Liability Insurance Risk � Introduce ANI Performance Indicator Areas � Introduce ANI Performance Indicator Areas � � Performance Trends Performance Trends “RETS / REMP 2004” AMERICAN NUCLEAR INSURERS Nuclear Liability Insurance Risk Nuclear Liability Insurance Risk Nuclear Liability Insurance Risk Nuclear Liability Insurance Risk � � $300 US Million Provided to Each US NPP Site $300 US Million Provided to Each US NPP Site � � Protection Covers Operators & Suppliers Against Protection Covers Operators & Suppliers Against Bodily Injury or Property Damage Caused by Bodily Injury or Property Damage Caused by Nuclear Hazard Nuclear Hazard � � Losses Can Be Catastrophic Losses Can Be Catastrophic or or Non Non- -Catastrophic Catastrophic � � Claims Defense Costs Can Be Major Portion of Claims Defense Costs Can Be Major Portion of Claim Claim “RETS / REMP 2004” AMERICAN NUCLEAR INSURERS 1
Nuclear Liability Insurance Risk Nuclear Liability Insurance Risk Nuclear Liability Insurance Risk Nuclear Liability Insurance Risk � � Increased Public Awareness of NPP Effluent Increased Public Awareness of NPP Effluent Releases & Perception of Personal Risk Releases & Perception of Personal Risk � � Do not differentiate between Isotope of Cobalt- Do not differentiate between Isotope of Cobalt -60 60 and Tritium and Tritium � 1 atom Co- -60 ~ 1 atom of Tritium (perception) 60 ~ 1 atom of Tritium (perception) � 1 atom Co � NPP Releases Cause Harm ! � NPP Releases Cause Harm ! � � Majority of Claims from Offsite BI & PD Majority of Claims from Offsite BI & PD “RETS / REMP 2004” AMERICAN NUCLEAR INSURERS Nuclear Liability Insurance Risk Nuclear Liability Insurance Risk Nuclear Liability Insurance Risk Nuclear Liability Insurance Risk � � Can Mitigate Excessive Claims Defense Costs Can Mitigate Excessive Claims Defense Costs Through Evidence of Due Care and Proper Through Evidence of Due Care and Proper Operation Operation � ANI's Performance Indicator Areas Can Be � ANI's Performance Indicator Areas Can Be Used To Demonstrate Such Care Used To Demonstrate Such Care � ANI Engineering Rating Factor Program � ANI Engineering Rating Factor Program “RETS / REMP 2004” AMERICAN NUCLEAR INSURERS Power Reactor Liability Rating Power Reactor Liability Rating - - 5 Components 5 Components � � Reactor Type Reactor Type � � Reactor Use Reactor Use � � Reactor Size Reactor Size � � Reactor Location Reactor Location � � Type of Containment Type of Containment “RETS / REMP 2004” AMERICAN NUCLEAR INSURERS 2
Nuclear Liability Insurance Premium Nuclear Liability Insurance Premium Nuclear Liability Insurance Premium Nuclear Liability Insurance Premium � Ave Nuclear Liability Premium � Ave Nuclear Liability Premium ~ $725,000 (Single Operating Unit) ~ $725,000 (Single Operating Unit) “RETS / REMP 2004” AMERICAN NUCLEAR INSURERS ANI Engineering Rating Factor (ERF) ANI Engineering Rating Factor (ERF) � � Implemented 1981 Implemented 1981 � � Collaborative Effort Collaborative Effort � � Comparative Rating Basis Comparative Rating Basis � � Reflect Varying Performance of Individual Insureds and Thus Reflect Varying Performance of Individual Insureds and Thus the Insurance Risk to ANI Arising out of that Performance the Insurance Risk to ANI Arising out of that Performance � � Redistribute Total Nuclear Liability Insurance Premium Redistribute Total Nuclear Liability Insurance Premium Based on Individual Plant Performance (Premium Neutral) Based on Individual Plant Performance (Premium Neutral) 20% Credit Best Performers 20% Credit Best Performers 30% Surcharge 30% Surcharge Higher Risk Performers Higher Risk Performers “RETS / REMP 2004” AMERICAN NUCLEAR INSURERS Power Reactor Liability Rating - Power Reactor Liability Rating - 6 Components 6 Components Reactor Type Reactor Type Reactor Use Reactor Use Reactor Size Reactor Size Reactor Location Reactor Location Type of Containment Type of Containment ERF (Introduced 1981) ERF (Introduced 1981) “RETS / REMP 2004” AMERICAN NUCLEAR INSURERS 3
12 Performance Areas (Subfactors) 12 Performance Areas (Subfactors) Safety System RadWaste Unplanned Failures Shipments Automatic Scrams Significant Events Safety System Actuations ANI Liability ERF ERF Noble Gases Recommendations Airborne Iodine Regulatory & Particulate Performance Airborne Waterborne Waterborne Tritium Mixed Activity Tritium “RETS / REMP 2004” AMERICAN NUCLEAR INSURERS ERF Computation Process ERF Computation Process Computed Annually (Late Fall) Computed Annually (Late Fall) Most Recent Publicly Available Data Most Recent Publicly Available Data Moving 3 Year Weighted Average Moving 3 Year Weighted Average Year 1 - 50% Year 1 - 50% Year 2 - 33% Year 2 - 33% Year 3 - 17% Year 3 - 17% Compute Subfactor Value (0 - 10) Compute Subfactor Value (0 - 10) “RETS / REMP 2004” AMERICAN NUCLEAR INSURERS ERF Computation Process ERF Computation Process Subfactor Weighting Subfactor Weighting Sum Weighted Values Sum Weighted Values Statistically Scale Weighted Values Statistically Scale Weighted Values Develop Approximate Normal Distribution Develop Approximate Normal Distribution ERF Values Range 0.8 to 1.3 ERF Values Range 0.8 to 1.3 “RETS / REMP 2004” AMERICAN NUCLEAR INSURERS 4
Typical ERF Distribution Typical ERF Distribution Total Liability Premium 0.8 1.0 1.3 ERF Distribution Performance Rating Type Component ERF x Use x Size x Location x Containment Traditional Rating Component “RETS / REMP 2004” AMERICAN NUCLEAR INSURERS Subfactor Percent Contribution Subfactor Percent Contribution Safety System Actuations Noble Gases 3% 10% Unplanned Automatic Scrams 12% Airborne Iodine & Particulate 10% Safety System Failures 11% Airborne Tritium 10% Radwaste Shipments 9% Waterborne Mixed Activity 10% Significant Events 8% Waterborne Tritium ANI Liability Recommendations 10% 5% Regulatory Performance 2% The incremental change in nuclear liability premium resulting from each subfactor “RETS / REMP 2004” AMERICAN NUCLEAR INSURERS Performance Comparison Performance Comparison Independent of ERF Effect on Liability Independent of ERF Effect on Liability Premium Premium Inherent Differences Between Plant Inherent Differences Between Plant Designs and Types Factored In Designs and Types Factored In Performance Profiles Developed Performance Profiles Developed 12 Performance Areas 12 Performance Areas 11 Comparative Categories 11 Comparative Categories “RETS / REMP 2004” AMERICAN NUCLEAR INSURERS 5
Performance Comparative Categories Performance Comparative Categories BWR's PWR's Class MWth No. Units Class MWth No. Units BWR's All 34 PWR's All 69 BWR-B 1500-2500 7 PWR-B 1500-2500 10 BWR-C 2500-3000 9 PWR-C 2500-3000 23 BWR-D >3000 18 PWR-D >3000 35 All Plants 103 “RETS / REMP 2004” AMERICAN NUCLEAR INSURERS 5 Year Performance Trend 5 Year Performance Trend Noble Gases Noble Gases 260 Noble Gas (Curies Released) (3-Year Weighted Average) 150 109 98 65 (95,96,97) (96,97,98) (97,98,99) (98,99,00) (00,01,02) 1998 1999 2000 2001 2004 Insurance Syndicate Year - Data Years in () 100 86 85 84 4 79 79 80 78 78 76 75 71 ( % of plants with lower releases) 69 Performance Percentile 62 63 60 59 3 Quartiles 50 2 25 1 0 98 99 00 01 04 98 99 00 01 04 98 99 00 01 04 Plant Type Industry Plant Type & Size “RETS / REMP 2004” AMERICAN NUCLEAR INSURERS Noble Gases (2004) Noble Gases (2004) 3904 153 (3 Yr Wgtd Ave) 45 Curies 5 BWR-C BWR-D PWR-D PWR-C BWR-B PWR-B 1st Quartile 2nd Quartile 3rd Quartile 4th Quartile “RETS / REMP 2004” AMERICAN NUCLEAR INSURERS 6
Airborne Iodine & Particulate Airborne Iodine & Particulate (2004) (2004) 0.095364 0.004285 0.000568 (3 Yr Wgtd Ave) Curies 0.000076 BWR-C BWR-B PWR-B BWR-D PWR-C PWR-D 1st Quartile 2nd Quartile 3rd Quartile 4th Quartile “RETS / REMP 2004” AMERICAN NUCLEAR INSURERS Airborne Tritium (2004) Airborne Tritium (2004) 978 67 37 (3 Yr Wgtd Ave) Curies 16 PWR-C BWR-C PWR-D BWR-D BWR-B PWR-B 1st Quartile 2nd Quartile 3rd Quartile 4th Quartile “RETS / REMP 2004” AMERICAN NUCLEAR INSURERS Waterborne Mixed Activity (2004) Waterborne Mixed Activity (2004) 1.891 0.1234 0.0542 (3 Yr Wgtd Ave) Curies 0.01456 PWR-D PWR-B PWR-C BWR-B BWR-C BWR-D 1st Quartile 2nd Quartile 3rd Quartile 4th Quartile “RETS / REMP 2004” AMERICAN NUCLEAR INSURERS 7
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