Development and deployment of advanced nuclear technologies, along with continued operation of the existing nuclear fleet, are vital to meeting U.S. climate and energy security goals. To meet those goals, both the federal government and private sector are making significant investments in advanced nuclear technology.
For such investments to continue and grow, there needs to be certainty with respect to how legal liability will be handled in the unlikely event of a nuclear incident. For more than 65 years, the Price-Anderson Act has provided that certainty.
Price-Anderson has functioned well to protect the public by ensuring adequate funds are available to pay valid public liability claims, while also encouraging private sector investment in nuclear power. The Act is unique in the amount of private funds it makes available to protect the public. In fact, the sum of non-governmental funds made available pursuant to Price-Anderson in the U.S. exceeds the sum of non-governmental funds provided by the next ten highest liability frameworks in the world combined.
But a key provision of the Act—the authorization for the Nuclear Regulatory Commission and Department of Energy to indemnify licensees and contractors—will expire in 2025. This authority has been extended multiple times, most recently for 20 years through the Energy Policy Act of 2005.
In a December 2021 report to Congress, the Nuclear Regulatory Commission (NRC) concluded that Price-Anderson has “assured that significant funds are available to the public to satisfy claims if a nuclear event were to occur, enabled private sector participation in atomic energy, and operated for over 60 years with minimal cost to the taxpayer.” In its report, the Department of Energy (DOE) concluded that continuation of the Act is “in the best interests of DOE, its contractors, its subcontractors and suppliers, and the public.”
Despite these conclusions, the NRC report recommended only a 10-year extension—half that of the 20-year extension provided in 2005. In support of this shorter-term extension, the report cited the need to allow Congress to consider trends in advanced reactor development, as well as potential increases in plant shutdowns and decommissioning. But neither of these considerations warrant limiting Price-Anderson’s extension to a decade. To the contrary, short-term extension would create uncertainty at exactly the wrong time.
Both the private sector and U.S. government are making substantial investments in new nuclear technologies to help meet net-zero emissions targets and energy security needs over the next several decades. Successfully bringing these technologies to market requires a stable liability framework, which would be provided by a long-term or permanent extension of the Act. Specifically, investors and advanced reactor developers are already taking on uncertainty in a variety of areas (construction, supply chain, regulatory, etc.) to make new plant deployment a reality. Maintaining the Price-Anderson indemnification authority throughout the period that advanced reactor development and licensing is likely to be underway avoids introducing additional uncertainty related to liability, which could stall efforts to deploy these vital technologies.
With respect to decommissioning, the trend of reactor shutdowns noted in NRC’s 2021 report has not continued, and additional shutdowns are unlikely due to the 2022 Inflation Reduction Act’s production tax credit for operating nuclear plants and the Civil Nuclear Credit Program established by the bipartisan Infrastructure Investment and Jobs Act in late 2021. Also, as acknowledged in NRC’s report, the Price-Anderson system would continue to make a significant amount of non-governmental funding available, even if plant shutdowns continued.
Fortunately, the ADVANCE Act introduced by Senators Shelley Moore Capito, Tom Carper and Sheldon Whitehouse would provide a 20-year extension of the indemnification provisions of the Price-Anderson Act. The proposed 20-year extension matches the duration provided in the Energy Policy Act of 2005. Given the pressing need for advanced reactor technologies to meet the climate and energy security challenges facing the nation, a longer-term extension (i.e., 40-50 years) or permanent reauthorization would send an even stronger signal to investors and developers that the foundational liability provisions of the Price-Anderson Act will remain intact and would better reflect the urgent need to bring these crucial technologies to fruition.
The Price-Anderson Act has been meeting its twin aims of protecting the public and encouraging the development of commercial nuclear power for more than 65 years, with minimal costs to the federal government and the U.S. taxpayer. The next extension of the Act should promote the continued achievement of those twin aims over the long term.
