Senate Approval of Taxpayer-Backed Insurance Scheme for New Nuclear Plants Makes Energy Bill Much Worse
March 7, 2002
Senate Approval of Taxpayer-Backed Insurance Scheme for New Nuclear Plants Makes Energy Bill Much Worse
Special Interests Running Roughshod Over Energy Bill
WASHINGTON, D.C. ? A flawed Senate energy bill became significantly worse Thursday when senators added language to reauthorize a taxpayer-backed insurance scheme for a new generation of nuclear power plants, Public Citizen said today.
An amendment sponsored by Sen. George Voinovich (R-Ohio) to reauthorize the Price-Anderson Act passed 78-21. Originally approved in 1957, when commercial nuclear power was new, the Price-Anderson Act was supposed to be temporary. Recognizing that insurance companies wouldn’t cover nuclear power, the government agreed to craft an artificial insurance scheme that would allow the nuclear power industry to exist. The idea was that over time, nuclear energy would prove its safety record and the insurance industry would agree to cover nuclear plants.
But 45 years later, the insurance industry still refuses to take a chance on nuclear power.
Under Price-Anderson, the nuclear power industry is required to collectively come up with $9.4 billion to cover financial claims that would arise from a nuclear catastrophe. But $9.4 billion amounts to only a fraction of the devastating economic cost that would befall a community or a region in the event of a nuclear catastrophe. As long ago as 1982, a study conducted for the government by Sandia National Laboratories estimated the financial consequences of a nuclear accident might be as high as $314 billion.
“Insurance companies know a sucker bet when they see one, and that’s how they’ve always viewed nuclear power plants,” said Wenonah Hauther, director of Public Citizen’s Critical Mass Energy and Environment Program. “They won’t touch it. Sadly, the Senate isn?t as cautious.”
Congress has extended and modified the Price-Anderson Act repeatedly, most recently in 1987. Today’s nuclear power plants would continue to be covered by Price-Anderson even if the act expired as scheduled this summer. The only reason to reauthorize the law is to promote the construction of new nuclear power plants ? plants that, according to the Bush administration, need direct government subsidies for development.
“Basically, the public’s financial protection in the case of a nuclear accident is backed by nothing more than the continued stability of energy conglomerates,” Hauter said. “And from Pacific Gas & Electric’s bankruptcy to the shattered retirement savings of Enron employees, energy conglomerates have shown themselves to be anything but stable.”
During Thursday?s Senate debate, supporters of the Voinovich amendment wrongly justified their vote by claiming that nuclear power is “clean.” Yet the nation has no workable long-term solution for handling the existing tens of thousands of tons of deadly nuclear waste. The Bush administration?s designation of Yucca Mountain in Nevada as the nuclear waste dump sparked bipartisan opposition, underscoring that a flawed solution like Yucca Mountain is far from being a genuine, scientifically sound solution. By voting to reauthorize Price-Anderson, senators voted to generate even more deadly radioactive waste.
Prior to passage of the Voinovich amendment, Public Citizen was among a coalition of 15 taxpayer, consumer and environmental organizations urging passage of an alternative amendment sponsored by Sen. Harry Reid, D-Nev. That amendment would have reformed Price-Anderson to demand more accountability on the part of operators of existing plants and would not have extended the act to new plants. Reid withdrew that amendment while urging defeat of the Voinovich amendment.
In November, the U.S. House of Representatives also reauthorized the Price-Anderson Act. If the massive Senate energy bill currently under consideration passes, Senate and House versions of Price-Anderson reauthorization could be melded together in a conference committee.
Public Citizen last month urged defeat of the energy measure. Although the bill contains positive provisions dealing with fuel economy standards, renewable energy and conservation, it also mirrors many of the misguided, corporate-dominated promotions and giveaways to nuclear and fossil fuels embraced by the Bush-Cheney energy plan and passed by the House last summer.
“The bill was already severely flawed,” Hauter said. “The decision to extend government-sanctioned coddling of nuclear power makes it worse. Positive provisions of the bill such as those that would promote conservation, renewable energy and increased fuel economy should be stripped from the energy legislation and considered on their own merits. But taken all in all, the bill deserves to die.”
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