Nuclear industry critics take aim at liability cap extension


Nuclear industry critics take aim at liability cap extension

BY RACHEL FRAZIN - 03/28/24 6:00 AM ET


A smokestack with money on top of the image with a gavel on top of a stack of papers.Illustration / Samantha Wong; and Adobe Stock

Critics are warning that the recent government funding bill’s newly extended nuclear power liability cap could impact safety and prevent survivors from getting adequate compensation in the case of an accident. 

Congress’s 40-year extension of a law limiting how much money nuclear power companies are on the hook for prompted sighs of relief from the industry and supporters of the measure, who say the liability limit provides certainty for insurers and investors in the carbon-free power source.

But opponents of the extension fear it will disincentivize the industry from prioritizing the safety of nearby communities and hurt potential victims’ ability to secure adequate recompense if an accident were to occur.

Edwin Lyman, director of nuclear power safety with the Union of Concerned Scientists, said there are “very few actual mechanisms driving innovation to actually decrease risk to the public.”

He said removing the cap “would provide a strong incentive for reactor developers to truly put in features that would clearly reduce the risk of accidents.”

Thus far, concerns have been hypothetical, as the U.S. has not seen a nuclear accident whose damages have exceeded the law’s liability limits since it was first passed in 1957. 

“There have not been any commercial accidents or incidents with the U.S. fleet that have had public health consequences,” said Craig Piercy, executive director and chief executive officer of the American Nuclear Society. “I put its safety record up against any other technology that generates electrons.”

The Three Mile Island nuclear accident in 1979 in Pennsylvania is described by the Energy Department as having no direct health effects. But there are some studies that say there are increased cancer rates

But, critics say it only takes one incident. 

“I don’t think it’s likely … but it could happen,” said Victor Gilinsky, former commissioner with the Nuclear Regulatory Commission, a government nuclear safety board.

“We … have about 20, 25 reactors that are identical to the Fukushima reactors,” he added, referring to the site of a major 2011 nuclear accident in Japan following an earthquake and tsunami. “They’re the same design.”

The cap came about in the 1950s under the Price-Anderson Act, which sought to catalyze the nation’s nuclear power industry. 

The law requires nuclear power plants to have liability insurance to cover costs of up to $500 million. In the case of an accident, all of the country’s major nuclear plants — regardless of whether they were involved — would have to pay into an additional fund to compensate victims. 

In total, the maximum compensation from the fund and the insurance could be $16.1 billion, according to a nonpartisan Congressional Research Service report from January. 

Proponents of this approach say that it both helps the nuclear power industry stay viable and ensures the immediate availability of some compensation for survivors. They also note that it makes economical sense for insuring and investing in nuclear by providing certainty about the risk — thereby also making electricity cheaper for consumers.

“If all of a sudden Price-Anderson was taken away, it would mean much more expensive electricity [and] more carbon emissions down the line. It just would have been a bad thing for the U.S. [and] the world,” said Piercy.

He also said the law has provided a “a base level of protection” so that companies not only are willing to invest in nuclear but also to develop new nuclear technology. 

But, opponents say that in the case of a severe disaster, the maximum compensation would likely not be enough to cover the costs.

Lyman pointed to the cost of the Fukushima accident, which Japan has said could reach around $200 billion

“So if the scale of a nuclear disaster in the U.S. is anywhere near that order, there’s going to be a shortfall [of] at least tens, or even hundreds of billions of dollars,” he said.

The cap extension is not the only action Congress is eyeing to boost nuclear power. Recently, it provided up to $2.72 billion to bolster nuclear energy in another funding package. And, bipartisan and bicameral lawmakers are working on an additional nuclear package that they hope to advance in the months ahead.

“The extension of the Price-Anderson Act in the minibus sends a clear message that we are committed to the advancement of this safe and reliable power source, but this is only the first step,” Sens. Shelley Moore Capito (R-W.Va.) and Tom Carper (D-Del.) said in a written statement. 

“We must send bipartisan legislation to boost the development and deployment of new nuclear technologies to the president’s desk this year, and we are united in our commitment” to do so, the statement said.