STATEMENT OF SENATOR HARRY REID (D-NV)
ENVIRONMENT AND PUBLIC WORKS COMMITTEE
TRANSPORTATION, INFRASTRUCTURE, AND NUCLEAR SAFETY SUBCOMMITTEE
REAUTHORIZATION OF THE PRICE-ANDERSON ACT
JANUARY 23, 2002
I want to thank the witnesses for being here today to discuss the reauthorization of the Price-Anderson Act.
As many of you know, Price-Anderson has been with us for a long time.
The Act was first established almost 50 years ago for two purposes:
First, to allow for the commercial use of nuclear energy by providing liability certainty to a complex, untested technology;
Second, to assure compensation to the public in the event of an accident
I think we all agree that it has performed the first function well B that was the easy part.
But it is the second that we must really address -- that is the real challenge.
We must not shirk that responsibility.† You know the builders of the Titanic told people it was unsinkable, and only when the boat was in the water did its vulnerabilities become apparent.†
Thankfully, the Price-Anderson ship has not been put to the test yet.† I hope it never is B but we must prepare for that possibility.† And it is our job to make sure we donít skimp on the legislative lifeboats.
What should we do?
The nuclear power industry went through its troubled teenage years during the 1970s, moved through adolescence and has now settled into a comfortable middle age.† It no longer needs the federal government to nurture it.
Over the years, Price-Anderson has shifted more to fulfilling the second goal B providing the public with compensation in the event of a catastrophic nuclear accident.
But the law has become an upgraded Model T, with original parts and newfangled additions that just donít match.† What we really need is a brand new vehicle, one that is designed using todayís understanding to secure tomorrowís energy industry.†
The generation and selling of electricity are very different today than 50 years ago. †For better or worse, we now have unregulated electricity markets in many states, where competition is king and consumers are no longer captive to rate monarchies.††
A new electricity market demands a new Price-Anderson system.
This is not an easy task, however.† The basic problem appears to be that the costs of an accident would be just too big.† How big?† The General Accounting Office reported in 1986 that the costs could be in the tens of billions or even in the HUNDREDS of BILLIONS depending on which way the wind is blowing.
There can be no doubt that without some form of insurance, no nuclear power plant has the assets to cover the costs of a truly catastrophic accident.† The utility would simply go bankrupt first.
Unfortunately, even after 50 years, the private insurance industry still is only willing to insure a nuclear power plant for a few hundred million dollars B much less than the likely cost of a truly catastrophic accident.† The bulk of the Price-Anderson insurance comes from the industryís promise to share the burden and costs B up to $9 billion B in the event of an accident.
Thatís like promising to pay your health insurance premiums only after youíve been diagnosed with a debilitating disease B a disease that will keep you bedridden for years, unable to work or otherwise take care of yourself.† NO insurance company would be willing to let you get away with that.† And we cannot allow nuclear power plants to operate without adequate insurance.
The question we then have to ask is how can we fill the void left by the private insurance companies and insure nuclear power plants for a reasonable sum, in a way that is both fair to potential accident victims and guarantees payment in the event of an accident.†
Or perhaps the first question is why we should do this when we donít do it for other industries.† Maybe the market decision not to insure nuclear power plants adequately means nuclear plants should not be built, especially now that other, safer alternative energy sources are available.
Today, I hope to hear our witnesses address these issues.††