STATEMENT OF
SENATOR HARRY REID (D-NV)
ENVIRONMENT AND
PUBLIC WORKS COMMITTEE
TRANSPORTATION,
INFRASTRUCTURE, AND NUCLEAR SAFETY SUBCOMMITTEE
HEARING ON
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 don’t 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 don’t match. What
we really need is a brand new vehicle, one that is designed using today’s
understanding to secure tomorrow’s 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 industry’s
promise to share the burden and costs B up to $9 billion B in the event of an
accident.
That’s
like promising to pay your health insurance premiums only after you’ve 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 don’t 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.