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
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
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
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.