Statement Senator Jim Jeffords
Hearing on Price-Anderson Reauthorization
Subcommittee on Transportation, Infrastructure and Nuclear Safety
Wednesday, January 23, 2002, 10:00 a.m.
I am pleased to be here this morning to hear testimony regarding reauthorization of the "Price-Anderson" provisions of the Atomic Energy Act. My good friend Senator Reid, who as Subcommittee chair has called this hearing, will be delayed slightly, so I am happy to proceed this morning on his behalf.
Price-Anderson was enacted in 1957 as an amendment to the Atomic Energy Act. Its purpose was to ensure that adequate funds would be available to compensate victims of a nuclear accident, and to remove the threat of unlimited liability that would deter private companies from engaging in nuclear activities.
Price-Anderson is due to expire on August 1, 2002. However, existing Price-Anderson coverage for already-licensed power plants will not expire, since under the law, existing power plants are covered for the lifetime of the facility. The Price-Anderson coverage we are talking about is that which will apply to any new facilities licensed after August. Nuclear power supplies a very important part of our energy mix. In Vermont, nuclear power from the Vermont Yankee plant provides almost 30 percent of our electricity, as well as providing electricity to other New England States. Nationwide, nuclear power produces 20 percent of our electricity use. As an emissions-free energy source, it has many benefits.
However, nuclear energy is also burdened with serious concerns over waste disposal, and safety. Price-Anderson acts as a means of encouraging the development of nuclear power, and also sets a framework for providing financial coverage in the event of an accident at any of our nation's nuclear power facilities. Price-Anderson provides several important public benefits including simplifying claims in the event of an accident, and providing for immediate reimbursement in the case of an emergency. There are nonetheless a number of very legitimate questions about the appropriateness and adequacy of this legislation.
For example, how do we best ensure that companies have sufficient financial resources to pay the deferred premiums, which are not due until an accident occurs but which form the bulk of the coverage amounts?
Also, while the approximately $9 billion coverage, per nuclear accident, that Price-Anderson would supply is high in terms of insurance coverage, is it sufficient to cover the actual public and private costs of a catastrophic nuclear accident?
Price-Anderson was initially contemplated as temporary coverage to help a fledgling industry. Should that coverage now be extended indefinitely as some would suggest? Does this kind of insulation from liability, with the Federal government bearing responsibility for anything above the $9 billion per accident coverage, unfairly benefit the nuclear industry over other desirable energy forms such as wind and solar? Is existing Price-Anderson coverage sufficiently broad to cover terrorist acts?
These are all very important issues, and I thank today's witnesses for sharing their time and expertise with the Committee.