Issues > Energy > Printer Version
Nuclear Bailout
Price-Anderson Act

$n/a

"Many nuclear suppliers express the view that without Price-Anderson coverage, they would not participate in the nuclear industry." U.S. Nuclear Regulatory Commission, The Price-Anderson Act - Crossing the Bridge to the Next Century: A Report to Congress, October 1998.

The Price-Anderson Act, originally enacted by Congress in 1957, limits the liability of the nuclear industry in the event of a nuclear accident in the United States. The Act covers large power reactors, small research and test reactors, fuel reprocessing plants and enrichment facilities for incidents that occur through plant operation as well as transportation and storage of nuclear fuel and radioactive wastes.
Price-Anderson sets up two tiers of insurance. Each utility is required to maintain the maximum amount of coverage available from the private insurance industry - currently $200 million per reactor. If claims following an accident exceed that amount, all nuclear operators must pay up to $88 million for each reactor they operate. As of August 1998, Price-Anderson capped insurance coverage for any nuclear accident at $9.43 billion

Green Scissors Proposal
Repeal the Price-Anderson Act. The nuclear industry is a mature industry that should be fully accountable for nuclear accidents and should purchase risk insurance on the private market.

Current Status

In February, Congress extended the Price Anderson Act until December 31, 2003. The
House energy bill (H.R. 6) extends Price-Anderson until 2017, while the current Senate energy bill extends the act permanently.

Program Hurts Taxpayers

Price-Anderson is a massive subsidy without which the nuclear power industry would not exist. The Act caps insurance coverage for any accident, thereby substantially reducing the cost of doing business in the nuclear power industry. All other industries insure to a reasonable limit against potential liabilities and risk loss of assets if the insurance is inadequate. The Nuclear Regulatory Commission (NRC) acknowledges that Price-Anderson "removed the deterrent to private sector participation in nuclear power programs by reducing the probability of financial catastrophe for industry participants due to liability resulting from a nuclear accident." The legislation was initially intended to provide investor confidence in what was viewed as a new and risky industry. However, over 40 years later, this mature industry still enjoys a massive subsidy that skews the true cost of nuclear power and potentially leaves taxpayers on the hook for damages from a severe nuclear accident.

An NRC commissioned study estimated that damages from a severe nuclear accident could cost as much as $560 billion in 2000 dollars. The current liability limit of $9.43 billion represents less than 2% of the $560 billion in potential costs. Furthermore, since current legislation provides no guarantee that victims would be properly compensated after an accident, it is likely that taxpayers would be left to pay for the human health costs in addition to the financial costs of the cleanup.

Program Hurts the Environment

By subsidizing the use of nuclear power, Price-Anderson distorts the energy market by encouraging power companies to invest or remain invested in nuclear energy rather than in sustainable energy technologies.

In the four decades since Price-Anderson was passed, the nuclear industry has created several thousand tons of highly radioactive waste that causes disposal problems and is a threat to human health.

Contacts

• Jim Riccio, Public Citizen, (202) 546-4996.
• Anna Aurilio, U.S. Public Interest Research Group, (202) 546-9707.
• Jill Lancelot, Taxpayers for Common Sense, (202) 546-8500 x105.