Nuclear Regulation:

A Perspective on Liability Protection for a Nuclear Plant Accident

RCED-87-124: Published: Jun 2, 1987. Publicly Released: Jun 2, 1987.

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In response to a congressional request, GAO provided information on issues pertaining to the Price-Anderson Act, which establishes funding to compensate for personal injury and property damage from a nuclear accident and limits the nuclear industry's liability for such accidents. GAO assessed the: (1) potential consequences of various nuclear power plant accidents; (2) likelihood of accident occurrence; and (3) impact of inflation on the protection the act originally provided.

GAO noted that the act will expire on August 1, 1987 unless Congress extends it. GAO found that: (1) the potential for a major commercial nuclear accident still exists; (2) private insurance would not fully cover the expected consequences of a major accident; (3) since indemnity agreements under the act cover the life of Nuclear Regulatory Commission (NRC) licenses and Department of Energy (DOE) contracts, expiration of the act's indemnity authority could have an immediate impact on the people living near and the contractors operating DOE nuclear facilities; and (4) DOE officials feel that, without the act's indemnity, contractors may be reluctant to operate DOE nuclear-defense facilities, and states may not agree to the transportation and storage of high-level nuclear waste. GAO also found that: (1) due to inflation, the act's liability protection is too low to provide reasonable compensation for the worst nuclear plant accident; (2) because of a lower liability limit for DOE nuclear activities, the level of protection for the public is lower than that of commercial plants; and (3) although the act covers all off-site accident damages resulting from the release of radioactive material, it is not clear if the act covers the costs for a precautionary evacuation when a release appears imminent but does not actually occur.

Matter for Congressional Consideration

  1. Status: Closed - Implemented

    Comments: In August 1988, the President signed legislation that increases Price-Anderson Act coverage to about $7 billion for a nuclear accident. The act sets the same liability limit for DOE and commercial licensees.

    Matter: Congress should: (1) reassess the commercial liability limit on the basis of inflation, estimates of accident consequences and probabilities, and the uncertainties in these estimates; (2) set the liability limit for DOE at the same level as for commercial licensees; and (3) clarify the act to provide equal protection for the public in the event of a precautionary evacuation.


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