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In the Atomic Energy Act Amendments Act removed the government monopoly on operating nuclear plants by creating a licensing system for private operators.
An experimental power plant was eventually constructed, but private industry expressed grave concern about the prospects for profitable operation of such plants.
In particular, companies were concerned about the harm which might be caused to the public in a worst-case nuclear accident.
A nuclear accident of privately held nuclear power appeared to be an impossible barrier since the possible massive magnitude would likely bankrupt any company held responsible, so private companies were not willing to get involved in the nuclear power industry.
In addition, it was determined that no insurance company was willing to take on the risk of indemnifying a company against such a huge potential liability, nor could an insurance company make a commitment beyond its own resources to pay.
Because of these difficulties, it looked like it would be extremely unlikely that private companies would want to enter the nuclear power industry.
The potential magnitude of worst-case accidents has been the subject of several major studies — however, the Nuclear Regulatory Commission has recently repudiated them all as inadequately calculated [see NUREG ] and is generating a new study.
To address these issues, Congress introduced the Price-Anderson Act in Companies were relieved of any liability beyond the insured amount for any incident involving radiation or radioactive releases regardless of fault or cause.
The act was intended to be temporary, and to expire in August as it was assumed that once the companies had demonstrated a record of safe operation they would be able to obtain insurance in the private market.
By it had become apparent that the industry would still be unable to obtain private insurance, so the act was extended until A provision was added to the Act which prevented companies from offering certain defenses to damages claims particularly defenses which claimed that the accident had not been their fault.
A minimum time limit was also introduced which could be surpassed by state law , giving claimants three years after discovering harm in which to make a claim.
The alterations were intended to make the process of obtaining funds from reactor companies easier, and to remove discrepancies in different states where different laws applied.
The new provisions only applied to incidents where a significant escape of radioactive material was deemed to have occurred an ENO, extraordinary nuclear occurrence.
In the act was extended for 12 years, up until These measures eliminated the contribution of the federal government to the insurance pool.
However, an explicit commitment was made that in the event of a larger accident, Congress would take whatever actions were necessary to provide full and prompt claims to the public.
This included the possibility of additional charges to reactor companies above and beyond the prescribed limits set forth in the Act.
The hydroelectric industry is not generally held financially liable for catastrophic incidents such as dam failure or resultant flooding.
While many industries have no explicit liability cap, in practice, liability in such industries may be limited to the assets of the company held to be at fault.
In addition, liability can be disputed in the absence of strict liability laws. Public Citizen has been particularly critical of Price-Anderson; it claims that the Act understates the risks inherent in atomic power, does not require reactors to carry adequate insurance, and would therefore result in taxpayers footing most of the bill for a catastrophic accident.
Price-Anderson has been criticized by many of these groups due to a portion of the Act that indemnifies Department of Energy and private contractors from nuclear incidents even in cases of gross negligence and willful misconduct although criminal penalties would still apply.
These beyond-insurance costs for worst-case scenarios are not unique to nuclear power, as hydroelectric power plants are similarly not fully insured against a catastrophic event such as the Banqiao Dam disaster, or large dam failures in general.
As private insurers base dam insurance premiums on limited scenarios, major disaster insurance in this sector is likewise provided by the Government.
From Wikipedia, the free encyclopedia. This article needs additional citations for verification. Please help improve this article by adding citations to reliable sources.
Unsourced material may be challenged and removed. Introduced in the House as H. Retrieved on Federal Register. Retrieved 12 February Hoffman Government Publishing Office.
August 20, March 4, May 1, LJ 18 : New York Times. Retrieved 20 October Public Citizen. September July Contemporary Economic Policy. This prospect might cause claimants to rush to the courthouse, while the present system provides for orderly and equitable compensation.
The present liability limitations imposed by the Price-Anderson system deny victims the full use of tort remedies in the event of a nuclear accident causing damages exceeding the limitation.
The two major objectives of the statute were to ensure adequate compensation to the victims of a nuclear power plant accident, and to promote private industry's participation in the development of nuclear power by limiting its liability in the event of an accident.
In the event that an accident resulted in damages exceeding these figures, Congress was charged with the obligation to "thoroughly review the particular incident and