DOE lobbies for renewal of insurance plan

Benjamin Grove

Friday, Sept. 7, 2001 | 11:11 a.m.

WASHINGTON -- Congress needs to quickly renew a government plan that makes taxpayers -- not utility companies -- liable for catastrophic nuclear power plant accidents if cleanup costs spiral out of control, an Energy Department official told a House panel this week.

Renewing the government insurance plan is a key to future proposals for constructing new nuclear power plants in America because private insurance companies won't insure them, experts have said.

The 44-year-old insurance plan, called the Price-Anderson Act, was originally designed as temporary government aid, but it "works well and should be renewed by this Congress," Deputy Energy Secretary Francis Blake told the House panel.

The act protects more than power companies -- it also shields DOE's private contractors from paying sky-high cleanup costs for an accident at a government nuclear research or waste site.

The plan also makes taxpayers potentially liable for an accident involving a truck or train hauling nuclear waste to Yucca Mountain for permanent storage. A plan to bury the nation's high-level waste at the site 90 miles northwest of Las Vegas, as early as 2010, has not been approved. The Yucca project is managed by the DOE.

"The nuclear industry is the only industry in America that is absolved of any guilt or liability for any accident, even if it is their own fault," said Rep. Shelley Berkley, D-Nev., who opposes renewing Price-Anderson.

Still, renewing Price-Anderson is said to have majority support in Congress. Lawmakers have renewed it three times since its inception.

The act works like this: nuclear power companies that own the nation's 106 commercial nuclear reactors (three are inactive) have insurance policies that require them to pay a maximum of only $200 million in damages for a nuclear reactor accident. If a cleanup cost more than $200 million, owners of the other 105 reactors agree to chip in up to about $88 million per reactor.

If an accident was so bad that each of the 105 reactors anted up their $88 million share, it would add up to roughly $9.4 billion, Blake said. If the accident cost even more than that -- Chernobyl cost roughly $200 billion by some estimates -- taxpayers would pay.

Critics say the plan amounts to an unique subsidy for an uninsurable industry. It's an unfair handout, said Rep. Edward Markey, D-Mass., the plan's most outspoken critic on the House Subcommittee on Energy and Air Quality.

"Now is the time for the nuclear power industry to grow up, to meet its maker in the industry," Markey said.

But supporters of renewing Price-Anderson said the DOE's contractors at its nuclear sites would not do business with the DOE if they had to pay their own insurance. And no power companies would ever build another nuclear plant without it, they said.

"Price-Anderson we know clearly works, and it needs to be reauthorized soon, well before its August 2002 expiration, and without significant changes," Energy and Commerce Committee chairman Billy Tauzin, R-La., said.

Subcommittee chairman Rep. Joe Barton, R-Texas, also said he wants to renew the act as soon as possible, saying it will "keep Americans protected in the unlikely event of nuclear accidents and ensure that cleanups continue uninterrupted at DOE facilities."

In his written comments, Blake said the act is cost-effective, and there are no satisfactory alternatives to renewing it.