WASHINGTON - The nuclear industry sees an opportunity to build power plants for the first time in several decades to quench the nation''s thirst for electricity, but an obscure insurance regulation that dates to the Cold War could become a big obstacle.

 The Price-Anderson Act, passed in the 1950s to limit the liability of the fledgling nuclear-power industry in catastrophes, comes up for renewal in Congress next year.

The law makes the government liable for huge disasters so the nuclear industry can more easily and cheaply obtain insurance for limited accidents.

But environmentalists, tax watchdog groups, and some lawmakers have started questioning whether the government should insure future nuclear power plants from meltdowns or transportation accidents, especially since the nuclear industry touts its exemplary safety record.

"You can''t have it both ways," said Jill Lancelot, legislative director for the Taxpayers for Common Sense. The group considers itself an independent taxpayers watchdog group.

"You''re either safe and you stand by that, or the industry needs to have the crutch (of Price-Anderson)," she said.

Few critics want to repeal the Price-Anderson Act. But many, including the taxpayers group, want to block future power plants from gaining

access to this government benefit.

The nuclear industry says Price-Anderson has worked well for nearly 50 years and should be extended to all future nuclear plants.

Now, each power plant is responsible for insurance liability up to $200 million. 

Each plant also contributes to an industrywide insurance pool. 

In an accident, a plant could take advantage of the pool's combined insurance of up to $9.5 billion. 

After that, the federal government steps in.

The government''s backing has allowed the nuclear industry to obtain insurance for smaller accidents and build up its insurance pool to $9.5 billion, said Tim Peckinpaugh, a lawyer representing the American Nuclear Insurers. The group insures nuclear power plants.

Without that pool of money, a single company involved in a nuclear accident would go bankrupt long before paying out $9.5 billion, and the government would be forced to pick up the tab, he said.

"Do you want to have Congress pay victims or industry to pay victims?" Peckinpaugh asked. "Nuclear is a unique risk."

Chances are very slim that a nuclear power plant would have a major accident, but if it did, the costs would be extraordinary, he said.

Price-Anderson provides government guaranty of claims above $9.5 billion, although no accident has ever forced the government to pay off.

About $190 million in claims have been paid by the industry''s insurance during the life of Price-Anderson, he said.

The 1981 Three Mile Island disaster, the nation's worst accident at a commercial power plant, led to $70 million in claims that the industry paid.

But critics also question the fairness of capping liability for nuclear operators and not other businesses.

"Why are they protected and others are not?" Senate Majority Whip Harry Reid, D-Nev., asked. "I think that it''s unfair on its face to give nuclear power this subsidy and not solar energy or geothermal."

David Orr <david@livingrivers.net> 
Director of Field Programs 
Living Rivers 
PO Box 466, Moab UT 84532
Tel 435.259.1063/Fax 435.259.7612 
Water Rights for Western Rivers