Tuesday, September 16, 2008

Price Anderson Act Explained

Price Anderson ActProviding a corrective to an Op-ed that ran in the Minneapolis-St. Paul Star Tribune, Marv Fertel, NEI's Executive VP and Chief Nuclear Officer had this to say,

The Price-Anderson Act was established by the federal government in 1957 and has evolved into one of the best third-party liability programs in the world, with a minimum of $10 billion worth of insurance coverage in the unlikely event of a nuclear power plant accident.

The program was subsidized by the federal government in its inception, but even then the government made money on the premiums from electric companies that owned nuclear power plants. Under this framework, the public has paid nothing due to nuclear power accidents, while insurance pools have paid about $200 million in claims and the industry has paid $21 million to the federal government in indemnity fees.

The nuclear power industry must provide $10 billion in insurance coverage to compensate the public in the event of an accident. So even if an individual company declares bankruptcy has a result of an accident at its plant, the rest of the industry will provide funding from the pool to compensate members of the public. If $10 billion is not sufficient, Congress can require the industry to contribute additional funds to the pool.

In the worst U.S. nuclear power plant accident at Three Mile Island, about $71 million in claims and litigation costs was covered by the Price-Anderson Act.

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