Analysis of the Price-Anderson Act

EMD-80-80: Published: Aug 18, 1980. Publicly Released: Aug 21, 1980.

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GAO conducted an analysis of the Price-Anderson Act, which governs offsite nuclear accident liability. The act was designed to encourage private industry to participate in the nuclear industry by assisting it with the costs of liability anticipated in the case of a nuclear accident. Recovery to accident victims is available through common law liability, coverage by private insurance, and government indemnification (reimbursement). Licensees must maintain financial security against offsite liability for a nuclear accident in an amount equal to that available through private insurance. Liability beyond this amount would be assumed by the federal government up to a limit of $560 million per incident.

Although this represents a subsidy to the nuclear power industry, without this protection, commercial nuclear power development would not have made the progress it has. The act is fulfilling its intended purpose of providing financial protection to the public and the nuclear industry in the event of a nuclear accident. The act should be retained in its basic form, but certain provisions should be revised. The limit on liability should be realistically defined, and the layers of financial coverage that compose the limit on liability should be reassessed. The premiums charged utilities in the event of a nuclear accident and the federal government indemnity could be revised upward.

Recommendation for Executive Action

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Chairman of the Nuclear Regulatory Commission should use the Three Mile Island accident, plus various scenarios similar to that accident, to define a more realistic limit on public liability, reassess the premium charged utilities in the event of a nuclear accident, and reassess the federal government indemnity. If it is determined that some revisions to the act are in order, the Chairman should also submit a legislative proposal to Congress outlining these revisions.

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