Insurance key to new nuke plants

Benjamin Grove

Friday, Sept. 13, 2002 | 9:42 a.m.

WASHINGTON -- Congress is poised to renew a 45-year-old plan that makes the government -- meaning taxpayers -- liable for nuclear plant cleanup if a catastrophic accident costs more than $10 billion.

At issue is the Price-Anderson Act, first passed in 1957 as a government incentive to encourage construction of nuclear plants.

The legislation sets up a pooled insurance plan: In an accident, the owner of the nuclear reactor would pay no more than $200 million. After that owners of the nation's other 105 nuclear reactors (three are not operating) would each chip in about $94 million. That would raise a total of nearly $10 billion. The government would be liable for costs beyond that.

A nuclear accident could cost as much as $300 billion in cleanup, nuclear critics say.

But that estimate is grossly inflated, industry officials say. In the industry's history, nuclear plants have paid only about $180 million to clean up their own accidents, including at Three Mile Island, and taxpayers have not had to pay a dime, industry officials say.

The act has been renewed three times since 1957, and a joint House-Senate panel on Thursday agreed to renew it again for another 15 years. The act is part of a comprehensive energy bill that lawmakers hope to pass in the coming weeks.

If the act is not renewed, the pooled insurance plan would remain in effect for existing reactors. But any new plants would not have been covered. New plant operators would be forced to find private insurance.

No insurance company would insure a nuclear plant, industry officials say, so they consider Price-Anderson key to the industry's future. No new plants have been constructed in the United States since the 1970s, but industry leaders aim to construct more in the next decade.

Price-Anderson also covers Energy Department contractors who work at government nuclear facilities. Contractors might quit without the insurance protection, act advocates say.

Nevada officials generally oppose the act because they do not support expanding nuclear power in America as long as the government plans to dump nuclear reactor waste at Yucca Mountain. Attempts by Majority Whip Sen. Harry Reid, D-Nev., to thwart the bill failed, spokeswoman Tessa Hafen said.

Critics of Price-Anderson call it a taxpayer subsidy of the industry.

"Their industry wouldn't even exist without the government supporting it," said Wenonah Hauter, of consumer and environmental watchdog group Public Citizen.

Nuclear industry officials say Price-Anderson helps pave the way for new plants in America.