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It makes available an insufficient pool of funds to cover minor damages from a nuclear or radiological incident while creating Federal indemnity for any catastrophhic accident to be paid from the Treasury. In addition, it prevents parties who are injured by criminal malfeasance on the part of nuclear plant management from collecting punative damage awards. The act currently covers all nuclear facilities constructed in the United States before 2002. It has been criticized by environmental groups, consumer groups and taxpayer watchdogs as a handout to the nuclear power industry.

The Price-Anderson Nuclear Industries Indemnity Act (commonly called the Price-Anderson Act) limits liability for nuclear plant investors. It requires nuclear plants to contribute a smaller amount of money to a common pool than insurance companies would require to insure the plant against liability arising from the release of radioactive material whether by accident or by misconduct. It provides Federal indemnification, meaning that taxpayers will be held financially responsible for any damages over and above the amount of the pool. In addition, injured parties are limited in their ability to recover damages and punative awards even for willful managerial misconduct. The act currently indemnifies all nuclear facilities constructed in the United States before 2002. It has been criticized by environmental groups, consumer groups and taxpayer watchdogs as a handout to the nuclear power industry.

The Atomic Energy Act, which was enacted in 1954, three years before Price-Anderson, was intended to spur the development of America's private nuclear power industry by allowing private industry to use atomic power for peaceful purposes, such as generating electricity. But government and industry officials soon realized that no-one was interested in building a nuclear power plant because of the lack of available insurance. Financial backers were were unwilling to risk the enormous financial liability that would result from a catastrophic accident at a nuclear plant. At the same time, lawmakers in the United States Congress began to worry that there was not adequate financial protection for the public in the event of an accident. Price-Anderson was born from those dual concerns; the act established a mechanism for compensating the public for injury or property damage in the event of a nuclear accident, and encouraged the development of nuclear power by indemnifying the industry from fault. Most analysts and researchers, including the nonpartisan Congressional Research Service, concur that Price-Anderson enabled the United States' current nuclear power plants to be built.

However, the law is not without its detractors, including Greenpeace International, Public Citizen, Taxpayers for Common Sense and other interest groups, who charge that Price-Anderson has amounted to an enormous giveaway to private industry at the American taxpayers' expense. According to Public Citizen, a 1990 study calculated that without Price-Anderson, nuclear power corporations would pay more than $3 billion annually to fully insure their operations. Even the United States Department of Energy has said Price-Anderson is essentially a subsidy for the nuclear industry .

Some of these groups also argue that the Price-Anderson Act was enacted when nuclear power was an immature industry that needed governmental protections to spur development, but that after 48 years such protections are no longer needed. In 1957, according to Public Citizen, the United States Senate stated that Price Anderson should only be needed for ten years because "the problem of reactor safety will be to a great extent solved and the insurance people will have had an experience on which to base a sound program of their own." However, the Energy Department has said it is "widely perceived that no new nuclear plants would be built in the United States without the cap on liability provided by the Price-Anderson Act." The last civilian nuclear plant completed in the United States started up in 1996. Additionally, these groups argue that Price-Anderson unfairly protects the nuclear power industry from the financial consequences of the most severe conceivable accidents.

The law has also been criticized by environmental groups such as Green Scissors. They assert that Price-Anderson distorts the energy market by providing companies and their financiers a strong financial incentive to remain invested in nuclear energy rather than exploring sustainable energy technologies.

Additionally, Price-Anderson has drawn fire from these groups for a portion of the law that indemnifies Department of Energy private contractors from nuclear incidents even in cases of gross negligence and willful misconduct. "No other government agency provides this level of taxpayer indemnification to non-government personnel," Public Citizen has said. Thus, any damage payments for nuclear incidents at Energy Department facilities — even those in cases of extreme negligence — would ultimately be paid by taxpayers.

The law suspends U.S. liability laws for nuclear power plants. Liability laws in the United States provide for actual damages as well as punitive damages to punish irresponsible behavior; as a consequence, businesses are motivated to act responsibly or face devastating losses in court.

The pool of money — which as of 2004 stood at about $9.5 billion — is contributed entirely by the nuclear industry, primarly through power reactor licensees, who are required to have $200 million worth of primary insurance as of 2001. In the event that claims deplete the pool of funds, the Congress of the United States is required to consider covering the excess cost, possibly by establishing additional assessments against the industry.

The constitutionality of the Price-Anderson Act was challenged in 1975 (Duke Power vs. Carolina Environmental Study Group, Inc.) and upheld by the Supreme Court in June, 1978. The suit had challenged the act on two grounds — first, that it violated the Fifth Amendment because it did not ensure adequate compensation for victims of accidents, and that it violated the Fourteenth Amendment because it treats nuclear accidents different than other accidents. The court found that the act did not violate the United States Constitution's equal protection provisions because the importance of nuclear power must be balanced against the burden of those who would potentially be harmed.

The act currently covers all nuclear facilities constructed in the United States before 2002. Under the Act, DOE nuclear facilities and contractors are indemnified by the federal government.

Nuclear insurance pools have paid $151 million ($70 million of which was related to the 1979 Three Mile Island meltdown) and the DOE $65 million since Price-Anderson was enacted 48 years ago.

The Act is commonly shortened to Price-Anderson Act and amends the Atomic Energy Act.

External Links and references

• Industry synopsis of Price-Anderson
• ANS synopsis of Price-Anderson
• GAO report on Price-Anderson
• Congressional Research Service report on Nuclear Energy Policy

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