Congress may raise limit on liability for nuclear-plant accidents. By reforming the 20-year-old Price-Anderson Act, lawmakers could affect other hazardous industries as well

An obscure law that limits accident liability for nuclear power plant operators is about to grab the spotlight. The Price-Anderson Act sets a cap of $630 million on the nuclear industry's liability following an accident. But the 20-year-old statute is set to expire in August.

Five separate bills have been introduced in Congress that would change the law. Some would raise the limit, others would remove it altogether. Hearings on the proposals are under way in Congress.

As debate swells over which proposal represents the best course of action, the fate of Price-Anderson could have a major effect on a wide range of activities:

A rewritten Price-Anderson Act may set the pace for accident legislation for other hazardous industries as well.

The fate of Price-Anderson might weigh strongly in decisions by utility officials to begin new nuclear power plant projects. Some versions could provide further incentive for conscientious management practices among plant operators.

A revamped act may permanently alter the relationship between the federal Department of Energy (DOE) and its contractors. This could have a significant impact on the department's efforts to permanently store radioactive waste.

``The issue is not only how to maximize the likelihood that people will be compensated after a nuclear accident, but how to do it in such a way that ensures that the safety concerns of operators will be heightened,'' says Rep. John F. Seiberling (D) of Ohio, author of one proposed bill and chairman of the House subcommittee hearings. ``It isn't clear to me from the hearings where we will have to come down to strike a balance.''

The central issue is whether the current Price-Anderson Act has become outdated. The act was adopted in 1957 to shield the fledgling nuclear industry from the threat of enormous liability claims.

The act requires each nuclear plant owner to purchase the maximum amount of private insurance available; assesses each reactor owner $5 million in the event of an accident causing damages beyond the insurance limit; and requires Congress to consider further disbursements if necessary. The act was supposed to encourage the growth of the young nuclear industry while ensuring the public some immediate compensation.

But now the variables surrounding the act are changing. No new nuclear projects are planned, so industry growth is no longer the same concern it once was. Supporters of a higher industry liability limit say that $630 million collected from the $5 million reactor assessments would not go far to cover the damages incurred by a major nuclear accident.

``The ceiling is grossly inadequate,'' says Representative Seiberling, whose bill would remove the liability limit altogether.

At the same time, the Energy Department is laying plans for its high-level nuclear waste repository program. Washington State officials recently balked at the $500 million limit the Price-Anderson Act sets on the government's liability in the wake of an accident.

``The liability cap has become one of the major roadblocks threatening to sidetrack cooperation between the affected states and the federal government,'' says Rep. Sid Morrison (R) of Washington. His bill would would also remove the cap on liability.

Such proposals disturb officials from the nuclear industry.

Steve Griffith Jr., general counsel for North Carolina's Duke Power Company, says that although no new nuclear plants are now being planned in the United States removal of the liability system would ``destroy the Price-Anderson system altogether'' and ``possibly foreclose the possibility of a nuclear alternative in the future.''

DOE officials oppose lifting the liability limit, because it would raise costs charged by its contractors. ``The contractors for DOE are doing work in the national interest and to go out and ask those companies to accept unlimited liability would be to change the balance of things,'' says Thomas Isaacs, director of policy in the department's Civilian and Radioactive Waste Division. ``For one thing, they would have to get their own insurance, which would raise our costs.''

Supporters of raised or eliminated liability limits also say market mechanisms will force utilities to look for -- and insurance companies to provide -- greater coverage. Although the current limit on liability insurance stands at $160 million per nuclear plant owner, some industry officials say those limits might be raised if insurance companies assumed a watchdog role over nuclear plant operations, much as they do when insuring elevators and industrial boiler machinery.

Whatever the outcome, it is expected that the fate of the Price-Anderson Act could have far-reaching influence on the development of legislation apportioning liability in other hazardous industries.

The recent toxic gas leak at Bhopal, India, and the 1979 accident at the Three Mile Island nuclear reactor in Pennsylvania ``have raised the public consciousness about this sort of thing enormously,'' says Sen Alan Simpson (R) of Wyoming, who has co-written a Senate bill to raise the liability limit.

``The Price-Anderson Act will become the precedent for hazardous industry legislation, says Frederick Bernthal, a member of the federal Nuclear Regulatory Commission.

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