Who Pays for Nuclear Power?

Who Pays for Nuclear Power?

The Price Anderson Act has discouraged the development of safer, less costly sources of energy than nuclear power. Join your voice to those calling for Congress to not renew its status by signing this online petition.

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UPDATE: November 30

If, God forbid, a nuclear power plant goes kaboom and you have to flee your home, then on top of all of the other problems you'll have, here are two more:

1. Your homeowner's insurance will not reimburse you. This is because of the Price Anderson Act, which limits the liability of nuclear power plant operators to a tiny fraction of the potential costs of an accident–terrorist-sponsored or otherwise. The act prevents insurance companies from suing the nuclear power industry to recover damages–which is why they can't afford to include nuclear accidents in homeowner's coverage.

2. You will, however, as a taxpayer be indirectly picking up the tab for the accident. Somebody has to–and the Price Anderson Act says it won't be the industry.

Price-Anderson, the nuclear power industry's 1950s-era insurance subsidy, is up for renewal, something that happens every fifteen years or so. And on a bleary, post-Thanksgiving Tuesday, November 27, the House Republicans sneaked it through. They did so under a format usually reserved for noncontroversial matters, like renaming post offices or court houses–"suspension of the rules"–which meant debates were limited to twenty minutes on each side, with no ammendments and no record of the votes. Keith Ashdown, a spokesman for Taxpayers for Common Sense, called it "an abuse of the legislative process."

Considering that George W. Bush became President via the Supreme Court's equivalent of "suspension of the rules," it's unsurprising that the Administration was pleased. A White House statement praised the House vote, noting, "To assure the future of nuclear energy, liability coverage must continue for nuclear activities."

So the White House–which launched the atomic "renaissance" now under way by talking up the virtues of nuclear power–makes the interesting admission that the nuclear industry could never survive in a free-market system.

For Price-Anderson to sail to the rescue of this poor widdle uncompetitive puddy-tat of an industry, the Democratic-controlled Senate also must agree. Majority leader Tom Daschle said on November 27 the topic might come up in January.

* * *

Congress is pondering ways to shore up security and safety at the nation's nuclear power plants, from stockpiling medicines for radiation poisioning to expanding emergency evacuation plans. But the dark horse coming up fast is something else: an industry-favored piece of legislation that, in the unfortunate event of a nuclear catastrophe, makes damn sure that someone else foots the cost.

When it comes to improving security, the industry's critics are active. Massachusetts Democrat Edward Markey has introduced a bill in the House to create potassium iodide stockpiles near nuclear power plants. Potassium iodide was administered in 1986 to Soviet children who were near the Chernobyl disaster, and is credited with preventing thousands of thyroid cancers among them. "Potassium iodide is to radiation exposure what Cipro is to anthrax," Markey said in a statement.

New York Senator Hillary Clinton also has called for potassium iodide stockpiles, along with a plan to evacuate New York City should anything–terrorist-sponsored or otherwise–go wrong at the Indian Point nuclear power plant, just 40 miles up the Hudson River from Manhattan. Clinton and her Democratic colleague from Nevada, Harry Reid, also favor legislation to federalize nuclear plant security, a la the airports.

But talk is cheap, and the action will start Tuesday, November 27, on the House Floor. Louisiana Republican Billy Tauzin has scheduled a vote on HR 2983, a bill to renew the Price-Anderson Act, a 1950s-era insurance subsidy for the nuclear power industry that expires next summer. Tauzin's Commerce Committee tentatively approved the bill in a debate-free Halloween-day voice vote; on Tuesday, the bill will come before the full House for an up-down vote, under rules limiting debate and prohibiting amendments.

"Well, now isn't this just like the nuclear industry and its allies, bringing us a real turkey for Thanksgiving?" complains a statement by Public Citizen, the consumer advocacy group. "Attaching a controversial piece of legislation to unrelated legislation, just after a major national holiday, without debate, about limiting industry liability on hundreds of nuclear reactors after the September 11th tragedy?"

Insurers are pros at assessing risk; when the federal government started talking up civilian nuclear power plants in the 1950s, insurers assessed the risks and ran for cover. Enter the 1957 Price-Anderson act, which today limits the nuclear industry's collective liability for any mishaps to a ballpark of about $12 billion. For comparison, estimates of the costs of Chernobyl run to about thirty times that; while a 1982 study by the Sandia National Laboratories suggested the cost of a major US nuclear accident would run to more than forty times the industry's current liability cap (in today's dollars). That's to say nothing of the human costs in immediate deaths and long-term cancers.

What happens if HR 2983 is voted down, and Price-Anderson not renewed? Most likely, no new nuclear power plants would be built. As even Vice President Dick Cheney has conceded, without Price-Anderson's security, "Nobody's going to invest in nuclear power." Voting down HR 2983 would in particular drive a stake through the heart of projects like the new-fangled Pebble Bed Modular Reactor–a most terrorist-friendly power plant, because its designs don't include a concrete containment building around the reactor.

But with or without HR 2983, existing nuclear plants keep their insurance breaks–and, no doubt, industry spokespeople will continue to boast that taxpayer-subsidized nuclear power is "cheap." Congress could, of course, revoke those protections, and force the industry to buy its own insurance–i.e., to pay its own way. But no one in Congress is seriouly discussing such radical free-market shock therapy.

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