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Price Anderson Act lets nuclear companies off the hook when big accidents occur

The Atomic Age and limited liability for nuclear accidents, The Hill, 20 Nov 15  By William F. Shughart II.……….Half a century ago, the United States was the only member of the global nuclear club. After detonating atomic bombs at Hiroshima and Nagasaki, Washington’s attention turned to civilian uses of nuclear power. “Atoms for Peace” was a catchphrase of the day. The Cold War was well underway then and civilian reactors were seen as a key producer of nuclear materials destined for military use.

To jumpstart nuclear power in the United States, and to assuage fears that utilities would go bankrupt if radioactive materials were accidentally released into the atmosphere, Congress passed – and President Eisenhower signed – the Price-Anderson Nuclear Industries Indemnity Act in 1957.

-…………-the very large expected costs of a major nuclear event, unlikely as it may be, explain why private insurers are unwilling to underwrite fully any and all future accident claims.

Price-Anderson clearly is a form of corporate welfare that indemnifies the nuclear industry in a worst-case scenario. Although the law doesn’t allow the industry to get off scot-free for all injuries it may cause and it doesn’t prevent injured parties from seeking compensation, the industry’s support for its periodic reauthorization suggests that it highly values Price-Anderson protections.

From an economist’s perspective, the downside of Price-Anderson, as with insurance in general, is that it encourages behavior known as “moral hazard.” Because the nuclear industry itself will not bear the full costs of a devastating accident, such accidents are more likely to happen than otherwise. http://thehill.com/blogs/congress-blog/energy-environment/260837-the-atomic-age-and-limited-liability-for-nuclear

November 21, 2015 - Posted by Christina Macpherson | business and costs, safety, USA