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August 2009

Key Facts

• The U.S. nuclear power industry has an umbrella of more than $10 billion in liability insurance protection to be used in the event of a reactor incident. Utilities—not the public or the federal government—pay for this insurance.

• This coverage began in 1957, when President Dwight Eisenhower signed the Price-Anderson Act. The act has proven so successful that it has served as a model for other legislation that protects the public against potential losses from hazards.

• Insurance pools have paid more than $200 million in claims and litigation costs since the act went into effect. They disbursed approximately $71 million of that total in claims and litigation costs related to the 1979 accident at Three Mile Island 2.

Benefits of the Act
The Price-Anderson Act provides no-fault insurance to benefit the public in the event of a nuclear power plant accident the U.S. Nuclear Regulatory Commission deems to be an “extraordinary nuclear occurrence.”

The costs of this insurance, like many costs of nuclear-generated electricity, are borne by the industry, unlike the corresponding costs of some other power sources. Costs from hydropower mishaps, such as dam failure and resultant flooding, for example, are borne directly by the public. The 1977 failure of the Teton Dam in Idaho caused $500 million in property damage, but the only compensation provided to those affected was about $200 million in low-cost government loans.

Under the Price-Anderson framework, the public has paid nothing, while insurance pools have paid roughly $200 million in claims, and the nuclear power industry has paid $21 million to the federal government in indemnity fees. The act has proven so successful that Congress has used it as a model for legislation to protect the public against potential losses or harm from other hazards, including faulty vaccinations, medical malpractice and toxic waste.

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