Price-Anderson Nuclear Industries Indemnity Act
Encyclopedia
The Price-Anderson Nuclear Industries Indemnity
Act (commonly called the Price-Anderson Act) is a United States
federal law
, first passed in 1957 and since renewed several times, which governs liability-related issues for all non-military
nuclear facilities constructed in the United States before 2026. The main purpose of the Act is to partially indemnify the nuclear industry against liability claims arising from nuclear incidents while still ensuring compensation coverage for the general public. The Act establishes a no fault insurance-type system in which the first approximately $12.6 billion (as of 2011) is industry-funded as described in the Act. Any claims above the $12.6 billion would be covered by a Congressional mandate to retroactively increase nuclear utility liability or would be covered by the federal government. At the time of the Act's passing, it was considered necessary as an incentive for the private production of nuclear power
— this was because electric utilities viewed the available liability coverage (only $60 million) as inadequate.
In 1978, the Act survived a constitutional challenge in the Supreme Court
case Duke Power Co. v. Carolina Environmental Study Group
(see below). The Act was last renewed in 2005 for a 20-year period.
If a coverable incident occurs, the Nuclear Regulatory Commission
(NRC) is required to submit a report on the cost of it to the courts and to Congress. If claims are likely to exceed the maximum Price-Anderson fund value, then the President is required to submit proposals to Congress. These proposals must detail the costs of the accident, recommend how funds should be raised, and detail plans for full and prompt compensation to those affected. Under the Act, the administrators of the fund have the right to further charge plants if it is needed. If Congress fails to provide for compensation, claims can be made under the Tucker Act
(in which the government waives its sovereign immunity
) for failure by the federal government to carry out its duty to compensate claimants.
Price-Anderson also covers Department of Energy
(DOE) facilities, private licensees, and their subcontractors including the USEC uranium enrichment plants, national laboratories and the Yucca Mountain nuclear waste repository. Any payments from the fund for accidents arising at DOE facilities come from the US treasury. The fund size for such installations is set by legislation (also at $11.6 billion), rather than being based upon the number of plants contributing to the fund.
Since Price-Anderson was enacted, nuclear insurance pools have paid out about $151 million ($70 million of which was related to the 1979 Three Mile Island accident
) in claims, while the Department of Energy has paid out $65 million.
:
(D-Ill.) and Senator Clinton Presba Anderson
(D-N.M.), both of whom eventually chaired Congress's Joint Committee on Atomic Energy.
The Atomic Energy Act of 1946, which followed the development of nuclear technology during World War II
, had created a framework for operation of nuclear plants under government control. The intention of the government was to apply this technology to civilian industry, especially in using nuclear plants to generate electricity. In 1954 the Atomic Energy Act Amendments Act removed the government monopoly on operating nuclear plants by creating a licensing system for private operators. The structure of the insurance industry as it existed until 1955 was incapable of providing the extent of coverage needed to adequately address the risks of nuclear power. The "amount of insurance required could not be underwritten at the time by any single or joint company effort".
A power plant, Shippingport, was eventually constructed, but electric utility executives expressed concerns about limited size of liability coverage offered by the insurance market ($60 million). A nuclear accident of privately held nuclear power appeared to be an impossible barrier since the possible magnitude of claims could bankrupt any electric utility held responsible. Nor could an insurance company offer insurance policies with limits beyond its own resources to pay. Because of these difficulties, it looked like it would be extremely unlikely that electric utilities would want to enter the nuclear power industry.
The potential magnitude of worst-case accidents has been the subject of several major studies, such as WASH-740
, WASH-1400
, CRAC-II
, and NUREG-1150
. The Nuclear Regulatory Commission
(NRC) is currently developing State-of-the-Art Reactor Consequence Analyses
(SOARCA), which is examining potential safety failures with probabilities of "occurring more than once in a million reactor years, or more than once in ten million reactor years for accidents that may bypass containment features"
To address these issues, Congress introduced the Price-Anderson Act in 1957. The Act required companies to obtain the maximum possible insurance cover against accidents, determined to be $60 million, and provided a further government commitment of $500 million to cover any claims in excess of the private insurance. Companies were relieved of any liability beyond the insured amount for any incident involving radiation or radioactive releases regardless of fault or cause. The act was intended to be temporary, and to expire in August 1967 as it was assumed that once the companies had demonstrated a record of safe operation they would be able to obtain insurance in the private market. At the same time, Congress encouraged the insurance industry to develop a way that power plant operators could meet their financial protection responsibilities. The insurance industry responded by creating an insurance pool called American Nuclear Insurers (ANI), which today includes 60 U.S. property and casualty insurance companies who represent some of the largest insurance companies in the country.
In 1975 the act was extended for 12 years, up until 1987. The total amount of insurance remained the same, but a provision was added requiring each of the 60 or so reactors then in existence to contribute between $2 million and $5 million in the event of an uninsured accident. The insurance ceiling for each individual company was increased to $140 million. These measures eliminated the contribution of the federal government to the insurance pool. However, an explicit commitment was made that in the event of a larger accident, Congress would take whatever actions were necessary to provide full and prompt claims to the public. This included the possibility of additional charges to reactor companies above and beyond the prescribed limits set forth in the Act.
In 1988 the act was extended for 15 years up to August 2002. Individual insurance for each generator was increased to $200 million, and the total fund to $9.5 billion. For each reactor owned, the reactor company was liable to contribute up to $63 million towards compensation for any claim against any company, though this could only be recovered at a maximum rate of $10 million per year. Assessments were to be adjusted for inflation every 5 years. The same level of indemnity was provided for government DOE facilities, while small reactors (education and research oriented) were required to obtain $250,000 insurance and have a government-backed pool of $500 million in the event of accident. This extension provided that all cases resulting from a nuclear accident to be heard in a federal court, rather than local courts.
In February 2002 the act was temporarily extended to December 2003. After some debate in 2003, the Act was extended to 2017. The individual insurance for each site was increased to $300 million while fund contributions per reactor were increased to $95.8 million. In 2005 it was extended again through 2025 via the Energy Policy Act of 2005
.
of the Price-Anderson Act was upheld in June, 1978 by the Supreme Court
in the case of Duke Power Co. v. Carolina Environmental Study Group
link. The lawsuit challenged the act on two grounds — first, that it violated the Fifth Amendment
because it did not ensure adequate compensation for victims of accidents, and that it violated the Fourteenth Amendment
because it treats nuclear accidents differently from other accidents.
The court concluded:
(among others) are limited in liability to $75 million for damages (which can be paid by the fund), but are not indemnified from the cost of cleanup. As of 2010, before payouts related to the Deepwater Horizon drilling rig explosion, the fund stood at $1.6 billion.
, Greenpeace International, Public Citizen
and the Cato Institute
. Public Citizen has been particularly critical of Price-Anderson; it claims that the Act understates the risks inherent in atomic power, does not require reactors to carry adequate insurance, and would therefore result in taxpayers footing most of the bill for a catastrophic accident. An analysis by economists Heyes and Heyes (1998) places the value of the government insurance subsidy at $2.3 million per reactor-year, or $237 million annually.
In 2008 the Congressional Budget Office estimated the value of the subsidy at only $600,000 per reactor per year. Due to the structure of the liability immunities as the number of nuclear plants in operation is reduced the public liability in case of an accident goes up.
The free government-granted insurance given to for-profit nuclear plant operators in the Price-Anderson Act has been used as an example of corporate welfare
by Ralph Nader
.
Price-Anderson has been criticized by many of these groups due to a portion of the Act that indemnifies Department of Energy and private contractors from nuclear incidents even in cases of gross negligence and willful misconduct (although criminal penalties would still apply). "No other government agency provides this level of taxpayer indemnification to non-government personnel". The Energy Department counters those critics by saying that the distinction is irrelevant, since the damage to the public would be the same.
Indemnity
An indemnity is a sum paid by A to B by way of compensation for a particular loss suffered by B. The indemnitor may or may not be responsible for the loss suffered by the indemnitee...
Act (commonly called the Price-Anderson Act) is a United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
federal law
Federal law
Federal law is the body of law created by the federal government of a country. A federal government is formed when a group of political units, such as states or provinces join together in a federation, surrendering their individual sovereignty and many powers to the central government while...
, first passed in 1957 and since renewed several times, which governs liability-related issues for all non-military
Military
A military is an organization authorized by its greater society to use lethal force, usually including use of weapons, in defending its country by combating actual or perceived threats. The military may have additional functions of use to its greater society, such as advancing a political agenda e.g...
nuclear facilities constructed in the United States before 2026. The main purpose of the Act is to partially indemnify the nuclear industry against liability claims arising from nuclear incidents while still ensuring compensation coverage for the general public. The Act establishes a no fault insurance-type system in which the first approximately $12.6 billion (as of 2011) is industry-funded as described in the Act. Any claims above the $12.6 billion would be covered by a Congressional mandate to retroactively increase nuclear utility liability or would be covered by the federal government. At the time of the Act's passing, it was considered necessary as an incentive for the private production of nuclear power
Nuclear power
Nuclear power is the use of sustained nuclear fission to generate heat and electricity. Nuclear power plants provide about 6% of the world's energy and 13–14% of the world's electricity, with the U.S., France, and Japan together accounting for about 50% of nuclear generated electricity...
— this was because electric utilities viewed the available liability coverage (only $60 million) as inadequate.
In 1978, the Act survived a constitutional challenge in the Supreme Court
Supreme Court of the United States
The Supreme Court of the United States is the highest court in the United States. It has ultimate appellate jurisdiction over all state and federal courts, and original jurisdiction over a small range of cases...
case Duke Power Co. v. Carolina Environmental Study Group
Duke Power Co. v. Carolina Environmental Study Group
Duke Power Co. v. Carolina Environmental Study Group, 438 U.S. 59 , was a case in which the Supreme Court of the United States overturned the Fourth Circuit's ruling that the Price Anderson Act violated equal protection by treating victims of nuclear accidents differently than the victims of other...
(see below). The Act was last renewed in 2005 for a 20-year period.
Funding and procedures
Power reactor licensees are required by the act to obtain the maximum amount of insurance against nuclear related incidents which is available in the insurance market . Any monetary claims that fall within this maximum amount are paid by the insurer(s). The Price-Anderson fund, which is financed by the reactor companies themselves, is then used to make up the difference. Each reactor company is obliged to contribute up to $111.9 million per reactor in the event of an accident with claims that exceed the $375 million insurance limit. , the maximum amount of the fund is approximately $12.22 billion ($111.9m X 104 reactors) if all of the reactor companies were required to pay their full obligation to the fund. This fund is not paid into unless an accident occurs. However, fund administrators are required to have contingency plans in place to raise funds using loans to the fund, so that claimants may be paid as soon as possible. Actual payments by companies in the event of an accident are capped at $17.5 million per year until either a claim has been met, or their maximum individual liability (the $111.9 million maximum) has been reached.If a coverable incident occurs, the Nuclear Regulatory Commission
Nuclear Regulatory Commission
The Nuclear Regulatory Commission is an independent agency of the United States government that was established by the Energy Reorganization Act of 1974 from the United States Atomic Energy Commission, and was first opened January 19, 1975...
(NRC) is required to submit a report on the cost of it to the courts and to Congress. If claims are likely to exceed the maximum Price-Anderson fund value, then the President is required to submit proposals to Congress. These proposals must detail the costs of the accident, recommend how funds should be raised, and detail plans for full and prompt compensation to those affected. Under the Act, the administrators of the fund have the right to further charge plants if it is needed. If Congress fails to provide for compensation, claims can be made under the Tucker Act
Tucker Act
Through the Tucker Act , the United States government has waived its sovereign immunity with respect to certain lawsuits....
(in which the government waives its sovereign immunity
Sovereign immunity
Sovereign immunity, or crown immunity, is a legal doctrine by which the sovereign or state cannot commit a legal wrong and is immune from civil suit or criminal prosecution....
) for failure by the federal government to carry out its duty to compensate claimants.
Price-Anderson also covers Department of Energy
United States Department of Energy
The United States Department of Energy is a Cabinet-level department of the United States government concerned with the United States' policies regarding energy and safety in handling nuclear material...
(DOE) facilities, private licensees, and their subcontractors including the USEC uranium enrichment plants, national laboratories and the Yucca Mountain nuclear waste repository. Any payments from the fund for accidents arising at DOE facilities come from the US treasury. The fund size for such installations is set by legislation (also at $11.6 billion), rather than being based upon the number of plants contributing to the fund.
Since Price-Anderson was enacted, nuclear insurance pools have paid out about $151 million ($70 million of which was related to the 1979 Three Mile Island accident
Three Mile Island accident
The Three Mile Island accident was a core meltdown in Unit 2 of the Three Mile Island Nuclear Generating Station in Dauphin County, Pennsylvania near Harrisburg, United States in 1979....
) in claims, while the Department of Energy has paid out $65 million.
Alterations to normal civil court procedures
The Act makes a number of changes to typical civil court proceduresCivil procedure
Civil procedure is the body of law that sets out the rules and standards that courts follow when adjudicating civil lawsuits...
:
- JurisdictionJurisdictionJurisdiction is the practical authority granted to a formally constituted legal body or to a political leader to deal with and make pronouncements on legal matters and, by implication, to administer justice within a defined area of responsibility...
is automatically transferred to federal courtsUnited States federal courtsThe United States federal courts make up the judiciary branch of federal government of the United States organized under the United States Constitution and laws of the federal government.-Categories:...
no matter where the accident occurred. - All claims from the same incident are consolidatedJoinderJoinder is a legal term, which refers to the process of joining two or more legal issues together to be heard in one hearing or trial. It is done when the issues or parties involved overlap sufficiently to make the process more efficient or more fair...
into one Federal court, which is responsible for prioritizing payouts and sharing funds equitably should there be a shortfall. - Companies are expressly forbidden to defend any action for damagesDamagesIn law, damages is an award, typically of money, to be paid to a person as compensation for loss or injury; grammatically, it is a singular noun, not plural.- Compensatory damages :...
on the grounds that an incident was not their fault. - An open-ended time limit is applied, which allows claimants three years to file a claim starting from the time they discover damage.
- Individuals are not allowed to claim punitive damagesPunitive damagesPunitive damages or exemplary damages are damages intended to reform or deter the defendant and others from engaging in conduct similar to that which formed the basis of the lawsuit...
against companies. (The act makes no provision for punishing companies responsible for an incident, but nuclear licensing regulations specify fines for breaches of safety regulations and criminal charges apply unaffected.)
Origins
The Price-Anderson Act is named for Representative Charles Melvin PriceCharles Melvin Price
Charles Melvin Price was a longtime member of the United States House of Representatives. Most notably, he served as the chairman of the United States House Committee on Armed Services between 1975 and 1985. He lost this position at the beginning of the 99th Congress...
(D-Ill.) and Senator Clinton Presba Anderson
Clinton Presba Anderson
Clinton Presba Anderson was an American Democratic Party politician who served as a U.S. Congressman from New Mexico , as the United States Secretary of Agriculture , and as a U.S. Senator from New Mexico .-Early life and career:Anderson was born in Centerville, South Dakota, on October 23, 1895...
(D-N.M.), both of whom eventually chaired Congress's Joint Committee on Atomic Energy.
The Atomic Energy Act of 1946, which followed the development of nuclear technology during World War II
World War II
World War II, or the Second World War , was a global conflict lasting from 1939 to 1945, involving most of the world's nations—including all of the great powers—eventually forming two opposing military alliances: the Allies and the Axis...
, had created a framework for operation of nuclear plants under government control. The intention of the government was to apply this technology to civilian industry, especially in using nuclear plants to generate electricity. In 1954 the Atomic Energy Act Amendments Act removed the government monopoly on operating nuclear plants by creating a licensing system for private operators. The structure of the insurance industry as it existed until 1955 was incapable of providing the extent of coverage needed to adequately address the risks of nuclear power. The "amount of insurance required could not be underwritten at the time by any single or joint company effort".
A power plant, Shippingport, was eventually constructed, but electric utility executives expressed concerns about limited size of liability coverage offered by the insurance market ($60 million). A nuclear accident of privately held nuclear power appeared to be an impossible barrier since the possible magnitude of claims could bankrupt any electric utility held responsible. Nor could an insurance company offer insurance policies with limits beyond its own resources to pay. Because of these difficulties, it looked like it would be extremely unlikely that electric utilities would want to enter the nuclear power industry.
The potential magnitude of worst-case accidents has been the subject of several major studies, such as WASH-740
WASH-740
WASH-740, "Theoretical Possibilities and Consequences of Major Accidents in Large Nuclear Power Plants" estimated maximum possible damage from a meltdown with no containment building at a large nuclear reactor. The report was published by the U.S...
, WASH-1400
WASH-1400
WASH-1400, 'The Reactor Safety Study, was a report produced in 1975 for the Nuclear Regulatory Commission by a committee of specialists under Professor Norman Rasmussen. It "generated a storm of criticism in the years following its release"...
, CRAC-II
CRAC-II
CRAC-II is both a computer code and the 1982 report of the simulation results performed by Sandia National Laboratories for the Nuclear Regulatory Commission...
, and NUREG-1150
NUREG-1150
NUREG-1150 is an improvement on WASH-1400 and CRAC-II using the results of plant-specific Probabilistic Risk Assessments...
. The Nuclear Regulatory Commission
Nuclear Regulatory Commission
The Nuclear Regulatory Commission is an independent agency of the United States government that was established by the Energy Reorganization Act of 1974 from the United States Atomic Energy Commission, and was first opened January 19, 1975...
(NRC) is currently developing State-of-the-Art Reactor Consequence Analyses
State-of-the-Art Reactor Consequence Analyses
The State-of-the-Art Reactor Consequence Analyses is a study of nuclear power plant safety conducted by the Nuclear Regulatory Commission...
(SOARCA), which is examining potential safety failures with probabilities of "occurring more than once in a million reactor years, or more than once in ten million reactor years for accidents that may bypass containment features"
To address these issues, Congress introduced the Price-Anderson Act in 1957. The Act required companies to obtain the maximum possible insurance cover against accidents, determined to be $60 million, and provided a further government commitment of $500 million to cover any claims in excess of the private insurance. Companies were relieved of any liability beyond the insured amount for any incident involving radiation or radioactive releases regardless of fault or cause. The act was intended to be temporary, and to expire in August 1967 as it was assumed that once the companies had demonstrated a record of safe operation they would be able to obtain insurance in the private market. At the same time, Congress encouraged the insurance industry to develop a way that power plant operators could meet their financial protection responsibilities. The insurance industry responded by creating an insurance pool called American Nuclear Insurers (ANI), which today includes 60 U.S. property and casualty insurance companies who represent some of the largest insurance companies in the country.
Extensions
By 1966 it had become apparent that the industry would still be unable to obtain adequate private insurance, so the act was extended until 1976. A provision was added to the Act which prevented companies from offering certain defenses to damages claims (particularly defenses which claimed that the accident had not been their fault). A minimum time limit was also introduced (which could be surpassed by state law), giving claimants three years after discovering harm in which to make a claim. The alterations were intended to make the process of obtaining funds from reactor companies easier, and to remove discrepancies in different states where different laws applied. The new provisions only applied to incidents where a significant escape of radioactive material was deemed to have occurred (an ENO, extraordinary nuclear occurrence).In 1975 the act was extended for 12 years, up until 1987. The total amount of insurance remained the same, but a provision was added requiring each of the 60 or so reactors then in existence to contribute between $2 million and $5 million in the event of an uninsured accident. The insurance ceiling for each individual company was increased to $140 million. These measures eliminated the contribution of the federal government to the insurance pool. However, an explicit commitment was made that in the event of a larger accident, Congress would take whatever actions were necessary to provide full and prompt claims to the public. This included the possibility of additional charges to reactor companies above and beyond the prescribed limits set forth in the Act.
In 1988 the act was extended for 15 years up to August 2002. Individual insurance for each generator was increased to $200 million, and the total fund to $9.5 billion. For each reactor owned, the reactor company was liable to contribute up to $63 million towards compensation for any claim against any company, though this could only be recovered at a maximum rate of $10 million per year. Assessments were to be adjusted for inflation every 5 years. The same level of indemnity was provided for government DOE facilities, while small reactors (education and research oriented) were required to obtain $250,000 insurance and have a government-backed pool of $500 million in the event of accident. This extension provided that all cases resulting from a nuclear accident to be heard in a federal court, rather than local courts.
In February 2002 the act was temporarily extended to December 2003. After some debate in 2003, the Act was extended to 2017. The individual insurance for each site was increased to $300 million while fund contributions per reactor were increased to $95.8 million. In 2005 it was extended again through 2025 via the Energy Policy Act of 2005
Energy Policy Act of 2005
The Energy Policy Act of 2005 is a bill passed by the United States Congress on July 29, 2005, and signed into law by President George W. Bush on August 8, 2005, at Sandia National Laboratories in Albuquerque, New Mexico...
.
Usage
Over the first 43 years of the Price-Anderson Act to 2000, the secondary insurance was not required. A total of $151 million was paid to cover claims (including legal expenses), all from primary insurance, including $71 million for Three Mile Island. Additionally, the Department of Energy paid about $65 million to cover claims under liability for its own nuclear operations in the same period.Constitutional challenge
The constitutionalityConstitutionality
Constitutionality is the condition of acting in accordance with an applicable constitution. Acts that are not in accordance with the rules laid down in the constitution are deemed to be ultra vires.-See also:*ultra vires*Company law*Constitutional law...
of the Price-Anderson Act was upheld in June, 1978 by the Supreme Court
Supreme Court of the United States
The Supreme Court of the United States is the highest court in the United States. It has ultimate appellate jurisdiction over all state and federal courts, and original jurisdiction over a small range of cases...
in the case of Duke Power Co. v. Carolina Environmental Study Group
Duke Power Co. v. Carolina Environmental Study Group
Duke Power Co. v. Carolina Environmental Study Group, 438 U.S. 59 , was a case in which the Supreme Court of the United States overturned the Fourth Circuit's ruling that the Price Anderson Act violated equal protection by treating victims of nuclear accidents differently than the victims of other...
link. The lawsuit challenged the act on two grounds — first, that it violated the Fifth Amendment
Fifth Amendment to the United States Constitution
The Fifth Amendment to the United States Constitution, which is part of the Bill of Rights, protects against abuse of government authority in a legal procedure. Its guarantees stem from English common law which traces back to the Magna Carta in 1215...
because it did not ensure adequate compensation for victims of accidents, and that it violated the Fourteenth Amendment
Fourteenth Amendment to the United States Constitution
The Fourteenth Amendment to the United States Constitution was adopted on July 9, 1868, as one of the Reconstruction Amendments.Its Citizenship Clause provides a broad definition of citizenship that overruled the Dred Scott v...
because it treats nuclear accidents differently from other accidents.
The court concluded:
- It is clear that Congress' purpose was to remove the economic impediments in order to stimulate the private development of electric energy by nuclear power while simultaneously providing the public compensation in the event of a catastrophic nuclear incident.
- The record supports the need for the imposition of a statutory limit on liability to encourage private industry participation and hence bears a rational relationship to Congress' concern for stimulating private industry's involvement in the production of nuclear electric energy.
- The Price-Anderson Act does, in our view, provide a reasonably just substitute for the common-law or state tort law remedies it replaces.
- The District Court's finding that the Act tends to encourage irresponsibility in matters of safety and environmental protection cannot withstand careful scrutiny, since nothing in the liability-limitation provision undermines or alters the rigor and integrity of the process involved in the review of applications for a license to construct or operate a nuclear power plant, and since, in the event of a nuclear accident the utility itself would probably suffer the largest damages.
- We view the congressional assurance of a
[ then] $560 million fund for recovery, accompanied by an express statutory commitment, to "take whatever action is deemed necessary [438 U.S. 59, 91] and appropriate to protect the public from the consequences of" a nuclear accident, 42 U.S.C. 2210 (e) (1970 ed., Supp. V), to be a fair and reasonable substitute for the uncertain recovery of damages of this magnitude from a utility or component manufacturer, whose resources might well be exhausted at an early stage.
- There is no equal protection violation, since the general rationality of the Act's liability limitation, particularly with reference to the congressional purpose of encouraging private participation in the exploitation of nuclear energy, is ample justification for the difference in treatment between those injured in nuclear accidents and those whose injuries are derived from other causes.
Comparisons to Other Industries
United States law requires payment of 8 cents per barrel of oil to the Oil Spill Liability Trust Fund for all oil imported or produced. For this payment, operators of offshore oil platformsOil platform
An oil platform, also referred to as an offshore platform or, somewhat incorrectly, oil rig, is a lаrge structure with facilities to drill wells, to extract and process oil and natural gas, and to temporarily store product until it can be brought to shore for refining and marketing...
(among others) are limited in liability to $75 million for damages (which can be paid by the fund), but are not indemnified from the cost of cleanup. As of 2010, before payouts related to the Deepwater Horizon drilling rig explosion, the fund stood at $1.6 billion.
Criticisms
The Price-Anderson Act has been criticized by various think tanks and environmental organizations, including Union of Concerned ScientistsUnion of Concerned Scientists
The Union of Concerned Scientists is a nonprofit science advocacy group based in the United States. The UCS membership includes many private citizens in addition to professional scientists. James J...
, Greenpeace International, Public Citizen
Public Citizen
Public Citizen is a non-profit, consumer rights advocacy group based in Washington, D.C., United States, with a branch in Austin, Texas. Public Citizen was founded by Ralph Nader in 1971, headed for 26 years by Joan Claybrook, and is now headed by Robert Weissman.-Lobbying Efforts:Public Citizen...
and the Cato Institute
Cato Institute
The Cato Institute is a libertarian think tank headquartered in Washington, D.C. It was founded in 1977 by Edward H. Crane, who remains president and CEO, and Charles Koch, chairman of the board and chief executive officer of the conglomerate Koch Industries, Inc., the largest privately held...
. Public Citizen has been particularly critical of Price-Anderson; it claims that the Act understates the risks inherent in atomic power, does not require reactors to carry adequate insurance, and would therefore result in taxpayers footing most of the bill for a catastrophic accident. An analysis by economists Heyes and Heyes (1998) places the value of the government insurance subsidy at $2.3 million per reactor-year, or $237 million annually.
In 2008 the Congressional Budget Office estimated the value of the subsidy at only $600,000 per reactor per year. Due to the structure of the liability immunities as the number of nuclear plants in operation is reduced the public liability in case of an accident goes up.
The free government-granted insurance given to for-profit nuclear plant operators in the Price-Anderson Act has been used as an example of corporate welfare
Corporate welfare
Corporate welfare is a pejorative term describing a government's bestowal of money grants, tax breaks, or other special favorable treatment on corporations or selected corporations. The term compares corporate subsidies and welfare payments to the poor, and implies that corporations are much less...
by Ralph Nader
Ralph Nader
Ralph Nader is an American political activist, as well as an author, lecturer, and attorney. Areas of particular concern to Nader include consumer protection, humanitarianism, environmentalism, and democratic government....
.
Price-Anderson has been criticized by many of these groups due to a portion of the Act that indemnifies Department of Energy and private contractors from nuclear incidents even in cases of gross negligence and willful misconduct (although criminal penalties would still apply). "No other government agency provides this level of taxpayer indemnification to non-government personnel". The Energy Department counters those critics by saying that the distinction is irrelevant, since the damage to the public would be the same.
See also
- Contract adjustment boardContract adjustment boardIn government contracting, a Contract Adjustment Board is a department board at the Secretariat level which deals with disputes and requests for extraordinary relief under Public Law 85-804 of Aug. 28, 1958.In brief:...
- Energy Policy Act of 2005Energy Policy Act of 2005The Energy Policy Act of 2005 is a bill passed by the United States Congress on July 29, 2005, and signed into law by President George W. Bush on August 8, 2005, at Sandia National Laboratories in Albuquerque, New Mexico...
- List of civilian nuclear accidents
- Nuclear accidents in the United StatesNuclear accidents in the United StatesAccording to a 2010 survey of energy accidents, there have been at least 56 accidents near nuclear reactors in the United States . The most serious of these was the Three Mile Island accident in 1979...
- Nuclear power accidents by country
- Nuclear energy policyNuclear energy policyNuclear energy policy is a national and international policy concerning some or all aspects of nuclear energy, such as mining for nuclear fuel, extraction and processing of nuclear fuel from the ore, generating electricity by nuclear power, enriching and storing spent nuclear fuel and nuclear fuel...
- Nuclear powerNuclear powerNuclear power is the use of sustained nuclear fission to generate heat and electricity. Nuclear power plants provide about 6% of the world's energy and 13–14% of the world's electricity, with the U.S., France, and Japan together accounting for about 50% of nuclear generated electricity...
- Nuclear Power 2010 ProgramNuclear Power 2010 ProgramThe "Nuclear Power 2010 Program" was unveiled by the U.S. Secretary of Energy Spencer Abraham on February 14, 2002 as one means towards addressing the expected need for new power plants...
- Nuclear power debateNuclear power debateThe nuclear power debate is about the controversy which has surrounded the deployment and use of nuclear fission reactors to generate electricity from nuclear fuel for civilian purposes...
- Nuclear power in the United States
- Nuclear safetyNuclear safetyNuclear safety covers the actions taken to prevent nuclear and radiation accidents or to limit their consequences. This covers nuclear power plants as well as all other nuclear facilities, the transportation of nuclear materials, and the use and storage of nuclear materials for medical, power,...
- Nuclear safety in the United StatesNuclear safety in the United StatesNuclear safety in the U.S. is governed by federal regulations and continues to be studied by the Nuclear Regulatory Commission . The safety of nuclear plants and materials controlled by the U.S...
- Public Law 85-804
- United States Department of EnergyUnited States Department of EnergyThe United States Department of Energy is a Cabinet-level department of the United States government concerned with the United States' policies regarding energy and safety in handling nuclear material...
- United States Atomic Energy CommissionUnited States Atomic Energy CommissionThe United States Atomic Energy Commission was an agency of the United States government established after World War II by Congress to foster and control the peace time development of atomic science and technology. President Harry S...
- Vienna Convention on Civil Liability for Nuclear DamageVienna Convention on Civil Liability for Nuclear DamageVienna Convention on Civil Liability for Nuclear Damage-Background:In September 1997, many of the world's governments took a significant step forward in improving the liability regime for nuclear damage...