Failure to Deal With a Crisis

Congress passed the 1957 Price-Anderson Act to stimulate what was then a young nuclear-power industry. This act substantially limits the liability of all nuclear-power facilities in the event of an accident, and exempts the builders and suppliers of nuclear facilities from any liability whatsoever. In 1957 the fledgling nuclear-energy industry needed all the help that it could get.

With more than 100 power plants on line, the nuclear-energy industry is no longer young or struggling, but the preferential insurance provisions are still in place, and the United States is dramatically underinsured against a major nuclear accident. Worst-case estimates place the damage of a nuclear accident in the United States at more than $15 billion. As it stands, the Price-Anderson Act cannot deal with a crisis of that magnitude.

A need to renew Price-Anderson last week gave Congress an opportunity to better insure this country against a nuclear accident, a chance that the House of Representatives promptly muffed. Though the House voted to increase industry liability to a maximum level of approximately $7 billion, it did not specify who would assume liability payments if that cap was exceeded, leaving open the possibility of endless litigation and stalemate over claims resulting from a nuclear accident.

The House also failed to repeal the immunity of Department of Energy contractors from accident liability. Although commercial nuclear utilities must self-insure, these institutions--defense contractors and research universities--remain exempt from liability even in the event of criminal negligence. The House even failed to amend a provision that gives nuclear-industry lawyers a stronger claim on the fund than the accident victims whom it is also intended to compensate.

Reforming the Price-Anderson Act would have recognized the maturation of the nuclear-power industry and acknowledged the industry's responsibility for risks. But some proponents of nuclear power saw Price-Anderson reform as a referendum on the future of their industry. The President threatened to veto any legislation that did not protect Department of Energy contractors, and the nuclear utilities walloped the House with a major lobbying effort. The nuclear-energy industry will likely continue to receive preferential treatment from this government, using its strength to prevent change in an archaic law whose only purpose was to let it grow strong.

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