U.S. nuclear power plant insurance plan questioned

 Gannett News Service
 July 28, 2001 23:20:57

 WASHINGTON - The nuclear industry sees an opportunity to build power
 plants for the first time in several decades to quench the nation's
 thirst for electricity, but an obscure insurance regulation that dates to
 the Cold War could become a big obstacle.

 The Price-Anderson Act, passed in the 1950s to limit the liability of the
 fledgling nuclear-power industry in catastrophes, comes up for renewal in
 Congress next year.

 The law makes the government liable for huge disasters so the nuclear
 industry can more easily and cheaply obtain insurance for limited
 accidents.

 But environmentalists, tax watchdog groups, and some lawmakers have
 started questioning whether the government should insure future nuclear
 power plants from meltdowns or transportation accidents, especially since
 the nuclear industry touts its exemplary safety record.

 "You can't have it both ways," said Jill Lancelot, legislative director
 for the Taxpayers for Common Sense. The group considers itself an
 independent taxpayers watchdog group.

 "You're either safe and you stand by that, or the industry needs to have
 the crutch (of Price-Anderson)," she said.

 Few critics want to repeal the Price-Anderson Act. But many, including
 the taxpayers group, want to block future power plants from gaining
 access to this government benefit.

 The nuclear industry says Price-Anderson has worked well for nearly 50
 years and should be extended to all future nuclear plants.

 Now, each power plant is responsible for insurance liability up to
 $200 million.

 Each plant also contributes to an industry wide insurance pool.

 In an accident, a plant could take advantage of the pool's combined
 insurance of up to $9.5 billion.

 After that, the federal government steps in.

 The government's backing has allowed the nuclear industry to obtain
 insurance for smaller accidents and build up its insurance pool to
 $9.5 billion, said Tim Peckinpaugh, a lawyer representing the American
 Nuclear Insurers. The group insures nuclear power plants.

 Without that pool of money, a single company involved in a nuclear
 accident would go bankrupt long before paying out $9.5 billion, and the
 government would be forced to pick up the tab, he said.

 "Do you want to have Congress pay victims or industry to pay victims?"
 Peckinpaugh asked. "Nuclear is a unique risk."

 Chances are very slim that a nuclear power plant would have a major
 accident, but if it did, the costs would be extraordinary, he said.
 Price-Anderson provides government guaranty of claims above $9.5 billion,
 although no accident has ever forced the government to pay off.

 About $190 million in claims have been paid by the industry's insurance
 during the life of Price-Anderson, he said.

 The 1981 Three Mile Island disaster, the nation's worst accident at a
 commercial power plant, led to $70 million in claims that the industry
 paid.

 But critics also question the fairness of capping liability for nuclear
 operators and not other businesses.

 "Why are they protected and others are not?" Senate Majority Whip Harry
 Reid, D-Nev., asked. "I think that it's unfair on its face to give
 nuclear power this subsidy and not solar energy or geothermal."

 Copyright 2000, The Arizona Republic.