The Price-Anderson Nuclear Industries Indemnity Act (commonly called the Price-Anderson Act) is a United States federal law, first passed in 1957 and since renewed several times, which governs liability-related issues for all non-military nuclear facilities constructed in the United States before 2026. The main purpose of the Act is to partially compensate the nuclear industry against liability claims arising from nuclear incidents while still ensuring compensation coverage for the general public. The Act establishes a no fault insurance-type system in which the first approximately $15 billion (as of 2021) is industry-funded as described in the Act. Any claims above the $15 billion would be covered by a Congressional mandate to retroactively increase nuclear utility liability or would be covered by the federal government. At the time of the Act's passing, it was considered necessary as an incentive for the private production of nuclear power — this was because electric utilities viewed the available liability coverage (only $60 million) as inadequate. In 1978, the Act survived a constitutional challenge in the Supreme Court case Duke Power Co. v. Carolina Environmental Study Group (see below). The Act's indemnification policy was last renewed in 2024 through 2045 within the ADVANCE Act.
How the law works
Funding and procedures Power reactor licensees are required by the act to obtain the maximum amount of insurance against nuclear related incidents which is available in the insurance market (as of 2017, $450 million per reactor). Any monetary claims that fall within this maximum amount are paid by the insurer(s). The Price-Anderson fund, which is financed by the reactor companies themselves, is then used to make up the difference. As of September 2013, each reactor company is obliged to contribute up to $121,255,000 per reactor in the event of an accident with claims that exceed the $450 million insurance limit. As of 2013, the maximum amount of the fund is approximately $12.61 billion ($121,255,000 × 104 reactors) if all of the reactor companies were required to pay their full obligation to the fund. This fund is not paid into unless an accident occurs. However, fund administrators are required to have contingency plans in place to raise funds using loans to the fund, so that claimants may be paid as soon as possible. Actual payments by companies in the event of an accident are capped at $18,963,000 per year until either a claim has been met, or their maximum individual liability (the $121,255,000 maximum) has been reached. This results in a maximum combined primary+secondary coverage amount of up to $13.06 billion for a hypothetical single-reactor incident. If a coverable incident occurs, the Nuclear Regulatory Commission (NRC) is required to submit a report on the cost of it to the courts and to Congress. If claims are likely to exceed the maximum Price-Anderson fund value, then the President is required to submit proposals to Congress. These proposals must detail the costs of the accident, recommend how funds should be raised, and detail plans for full and prompt compensation to those affected. Under the Act, the administrators of the fund have the right to further charge plants if it is needed. If Congress fails to provide for compensation, claims can be made under the Tucker Act (in which the government waives its sovereign immunity) for failure by the federal government to carry out its duty to compensate claimants. Price-Anderson also covers Department of Energy (DOE) facilities, private licensees, and their subcontractors including the USEC uranium enrichment plants, national laboratories and the Yucca Mountain nuclear waste repository. Any payments from the fund for accidents arising at DOE facilities come from the US treasury. The fund size for such installations is set by legislation (also at $12.6 billion), rather than being based upon the number of plants contributing to the fund. Since Price-Anderson was enacted, nuclear insurance pools have paid out about $151 million ($70 million of which was related to the 1979 Three Mile Island accident) in claims, while the Department of Energy has paid out $65 million.
Alterations to normal civil court procedures The Act makes a number of changes to typical civil court procedures:
Jurisdiction is automatically transferred to federal courts no matter where the accident occurred. All claims from the same incident are consolidated into one Federal court, which is responsible for prioritizing payouts and sharing funds equitably should there be a shortfall. Companies are expressly forbidden to defend any action for damages on the grounds that an incident was not their fault. An open-ended time limit is applied, which allows claimants three years to file a claim starting from the time they discover damage. Individuals are not allowed to claim punitive damages against companies. (The act makes no provision for punishing companies responsible for an incident, but nuclear licensing regulations specify fines for breaches of safety regulations and criminal charges which may apply remain unaffected.)
History of the Act
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