The Price-Anderson Act

Prefatory Note:

A visitor generously suggested ways to improve the accuracy of this article and its present version was written after receiving his comments.

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For as long as I can remember, anti-nukes have been claiming that the Price-Anderson Act protects nuclear power plants from liability. The plants are so dangerous, they claim, utilities won't accept responsibility for them.

The facts are very much different. A copy of the law can be found here.

I should say at the outset that I am not an attorney and therefore am not qualified to interpret law or court decisions. That said, when anti-nukes claim that the law protects utilities from liability, they conveniently leave out the fact that the liability limits only apply to federal courts, not to state courts. But don't take my word for it. Here is an excerpt from the US Supreme Court decision in the case of SILKWOOD v. KERR-McGEE CORP., decided January 11, 1984. [source]

"In sum, it is clear that in enacting and amending the Price-Anderson Act, Congress assumed that state-law remedies, in whatever form they might take, were available to those injured by nuclear incidents. This was so even though it was well aware of the NRC’s exclusive authority to regulate safety matters. No doubt there is tension between the conclusion that safety regulation is the exclusive concern of the federal law and the conclusion that a State may nevertheless award damages based on its own law of liability. But as we understand what was done over the years in the legislation concerning nuclear energy, Congress intended to stand by both concepts and to tolerate whatever tension there was between them. We can do no less. It may be that the award of damages based on the state law of negligence or strict liability is regulatory in the sense that a nuclear plant will be threatened with damages liability if it does not conform to state standards, but that regulatory consequence was something that Congress was quite willing to accept."

On the other hand, even this decision accepts the popular view that the original purpose of Price-Anderson was to encourage companies to enter a new field. Since the field is no longer new, one could ask why the law continues to exist. I think the answer lies in the other benefits. One benefit is that it clarifies the US Government’s responsibilities. Every aspect of nuclear energy, including design, construction, and operation, is supervised by the Federal Government. In the case of an accident, and in the absence of legislation, the Government very likely would find itself in the position of defendant. The act clarifies this point: the Government would only be on the hook after all other coverages, from commercial insurance and owners’ assets, have been paid out. A second benefit is that victims of an accident could recover their damages without suing. Under liability law, they would have to determine who was at fault and prove it in court. The process would take years and, even if they won, they’d lose because lawyers would take most of the money. Under Price-Anderson, they’d only have to show they had taken losses and they’d be compensated.

As it is, Price-Anderson is a requirement for anyone doing nuclear work. It doesn’t limit victims’ ability to recover damages. What it does is to guarantee that money will be there to pay them.