17 ELR 10185 | Environmental Law Reporter | copyright © 1987 | All rights reserved

The Price-Anderson Act — Limited Liability for the Nuclear Industry

Arnold W. Reitze Jr. and Deborah J. Rowe

Editors' Summary: The Price-Anderson Act, established in 1957 to encourage the then-fledgling commercial nuclear power industry by providing it with relative immunity from liability for an accident, expires August 1, 1987. Disagreements over whether and how the law should be renewed and modified have side-tracked legislation over the past few years, but with the August deadline nearing, congressional efforts have been stepped up. In this Article, Professor Reitze and Ms. Rowe discuss the purposes of the Price-Anderson Act and pose four fundamental questions regarding the future of the Act and any amending legislation. Significantly, the authors argue that the Act is woefully under-funded in the event of a serious accident and that the vagaries of the tort system will leave many victims undercompensated or not compensated at all. The authors also argue that the present system does not fairly allocate the insurance risks by effectively creating a system where premiums are deferred, creating only the illusion of coverage. The authors conclude that if the insurance industry is not willing to provide adequate liability coverage, the electric utility industry should create a self-insured compensation fund to more expeditiously and completely compensate victims of a nuclear power plant accident.

Arnold W. Reitze Jr. is a Professor of Law and the Director of the Environmental Law Program at George Washington University. He received his J.D. from Rutgers University in 1962, and his MPH in environmental health science from Johns Hopkins University in 1985. Deborah J. Rowe received her J.D. from George Washington University in 1987 and her B.A. from Colby College in 1981. Appreciation is expressed to George Carlo, Ph.D., and Professor Harold Green for their valuable comments.

[17 ELR 10185]

On April 26, 1986, a massive explosion ripped open Reactor No. 4 at the Soviet Union's nuclear facility at Chernobyl.1 First aid was quickly provided to the victims with the more serious injuries. Twelve hours after the accident a specialized medical team arrived. One hundred and twenty nine patients were sent to a specialized hospital in Moscow.2 Dr. Robert P. Gale, the American physician who worked with the Soviet physicians during the crisis, indicated that "more than 100 Soviet physicians were immediately deployed in the area of the power station and in Kiev to screen approximately 2000 people…. [T]hey identified 500 persons judged to be at risk. About 300 who received the highest doses were flown to Moscow; 200 were admitted to [a] hospital in Kiev."3 In responding to the accident at Chernobyl, the Soviet Union expended tremendous resources on acute care and evacuations.4 These expenditures will continue well into the future as follow up and chronic care are required.5

[17 ELR 10186]

The United States currently has 108 large commercial power reactors which could have accidents similar in effect to that of Soviet Reactor No. 4.6 If a disaster of similar magnitude were to occur in the United States, our citizens would probably not receive a level of assistance commensurate with that given to the Soviet citizens. The federal, state, and local governments would probably provide some emergency assistance, but such help is not legally mandated. Compensation to victims would be paid by those legally responsible under state tort law, but that could take considerable time to ascertain. Furthermore, the payment of damages for serious accidents is subject to § 170 of the Atomic Energy Act of 1954, commonly known as the Price-Anderson Act.7 Under this law, liability for any single commercial nuclear accident is limited to a total of $700 million; for any accident involving the Department of Energy (DOE) or their contractors, the limit is $500 million.

This Act, granting relative immunity to the nuclear power industry, expires August 1, 1987, and is up for renewal. In the wake of the Three Mile Island (TMI)8 accident in Pennsylvania and more recently, Chernobyl,9 this legislation has been and will continue to be hotly debated. Ironically, its renewal, rather than its repeal, is advocated by diverse camps. Richard Schmalz, in a statement of American Nuclear Insurers Mutual Atomic Energy Liability Underwriters, stated that "if Congress wishes to continue to encourage the development of nuclear power while taking all reasonable steps to protect the public, the existing Price-Anderson program affords a sound base."10 Keiki Kehoe of the Environmental Policy Institute, who testified on behalf of Environmental Action, Inc., Environmental Policy Institute, Friends of the Earth, Nuclear Information and Resource Service, Sierra Club, Union of Concerned Scientists, and U.S. Public Interest Research Group, stated in response to questions that "there are likely to be some benefits that the public could derive from a Price-Anderson if that Price-Anderson is significantly revised."11 Finally, Lando W. Zech Jr., presenting the statement of the U.S. Nuclear Regulatory Commission (NRC), stated that "[a] majority of Commissioners … believe that legislation to extend the Price-Anderson Act should provide for a higher but finite liability ceiling for reactor licensees."12

What is not agreed upon is the way the Price-Anderson Act should be modified. Without the Price-Anderson Act industry, including suppliers and subcontractors, would not participate in nuclear activities, though existing facilities would continue to be covered. Public interest groups support Price-Anderson because it assures more money may be available for victims. If a single utility lost its major asset in a nuclear accident and went bankrupt, only private insurance with a maximum coverage of $160 million would be available. Moreover, virtually all proposals contain no significant money for compensation but postpone to the future the need to supply the money to care for those injured.

This Article will briefly summarize the major provisions of the Act as it now stands. It will pose four fundamental questions regarding the legislation. It will review some of the bills that are currently being considered by Congress. Finally, it will draw some conclusions for the future of the Price-Anderson Act.

Overview of the Price-Anderson Act

Legislative Intent

When signed into law September 2, 1957,13 the purposes of the Price-Anderson Act were twofold. First, it was to encourage the then-hesitant power industry to embark upon the development of nuclear energy as a source of electric power.14 The industry had maintained (and continues to maintain) that "despite the remote possibility of a major nuclear accident, the consequences of such an accident, if it were to occur, could result in liability claims that would exhaust the levels of insurance that were then available and would impose on the nuclear industry large, potential losses for which no insurance was available."15

Secondly, the Act was to insure that victims of a nuclear accident would be compensated. It was believed that such legislation was required to protect the public from the vagaries of the tort system and the possibility that utilities might become judgment proof if such an accident were to occur. This belief is still held and vigorously defended.16

Consequently, a rather elaborate statutory framework was constructed. Under the Act, the victims of a nuclear power accident would have a relatively assured receipt of some compensation as a trade for a potentially larger, though possibly not collectable, traditional tort remedy. This trade was first created by meshing private insurance with a government indemnity, and after 1975 by meshing the same private insurance with retrospective assessments collected in an enterprise liability fashion.17 In addition, [17 ELR 10187] the 1966 amendment provided for immediate payments for emergency assistance (i.e., reimbursement of living expenses and lost wages); these payments would not amount to admissions of liability.18

The Current Act

In 1975, the Act was amended to its current form and given an expiration date of August 1, 1987.19 The 1975 amendments made significant changes to the original Act, especially with regard to the composition of the liability fund for commercial licensees. While DOE's contractor-operated activities retained the $500 million government indemnity established in 1957, commercial licensees began to be weaned off of the $500 million federal subsidy, with a greater share coming from private sources.20

Commercial licensees' liability funds first came from three sources, which was then reduced to two sources as the number of licensed reactors increased. The first layer in both instances is provided by the private insurance industry. Today the second layer is provided by a retrospective assessment of premiums from each of the utilities involved in nuclear power. The NRC set this assessment at $5 million per 100 megawatt (or greater) reactor, per incident (for a total maximum yearly assessment of $10 million per reactor).21 Initially, the government assured that $560 million was available by covering the difference between the combined private insurance and the industry's retrospective premiums. Since the number of reactors has continued to grow, as reactors under construction come on-line, the government no longer contributes and the insurance coverage has grown to $700 million at this writing.22 Liability is based on the number of licensed reactors; there can be more than one reactor at a site.

A provision for congressional review and action in the event of an incident involving damages in excess of the fund was added in 1975, but it merely codified the legislative history of the Act.23 The mechanism for "prompt handling, investigation, and settlement of claims for public liability" and the accompanying nonadmission of liability are also retained.24

In 1966, the concept of the "extraordinary nuclear occurrence" (ENO) was added to the Act, with a concomitant waiver of defenses.25 While an "ordinary" incident would proceed through the traditional tort system with the Price-Anderson caps and assurances, an "extraordinary" incident designation by the NRC would require the licensee or contractor to waive traditional tort defenses. Thus, the ENO determination, defined as "'an event resulting in substantial offsite release of radiation and likely to result in significant personal injury or damage to property,'" would remove certain hurdles for the nuclear accident victim.26 Significantly, the waiver of defenses such as contributory negligence, assumption of the risk, Act of God, charitable or governmental immunity, and statute of limitations (provided the suit was begun 3 years from actual or constructive discovery of injury and within 20 years after the incident), applies only if the NRC designated the accident an ENO. However, the ENO determination is not reviewable in court.27 Further, the waived defenses are not of tremendous benefit because proof of causation is the major hurdle plaintiffs face in cases of radiation injury.28 It should be noted that the current provision grants the U.S. district court in the district where the ENO takes place original jurisdiction and provides that any pending actions are to be transferred or removed to that court.29

Finally, the Act establishes a system for the allocation of funds once 15 percent of the liability limit has been paid in the event of an accident. At that time, the Act provides for the submission by the NRC and any other indemnitor or interested person "to such district court a plan for the disposition of pending claims and for the distribution of remaining funds available."30

[17 ELR 10188]

Over a nearly 30-year period, there has been only a 25 percent increase in coverage ($560 to $700 million), while the cost of living has increased 278 percent.31 Furthermore, federal liability for accidents at its own facilities has not changed since 1957.32 Thus, in the event of a serious accident, the victims would be dependent upon what additional compensation Congress might eventually choose to provide.33 With regard to this eventuality, Frederick M. Bernthal, a commissioner at the NRC, commented that it would be highly unlikely to assume that Congress would place the burden of additional compensation on the taxpayer.34

The Problem of Causation

At this juncture, we might reasonably ask whether the policy considerations originally at the heart of the Price-Anderson Act still exist. Are potential victims really trading efficient and probable receipt of some compensation for a less likely, though more magnanimous traditional tort recovery?

First, the resolution of claims concerning alleged radiation injuries or damages from nuclear accidents can hardly be seen as efficient or smooth. Second, the traditional tort system has changed significantly since 1957. Many bars to recovery have been lifted and awards have become enormous. Third, even under the Price-Anderson Act, the plaintiff must meet the substantive proof requirements imposed by state law. Only if an ENO determination is made are any defenses waived and significantly, even then, causation must be shown. For those acutely injured, proving the elements of a tort cause of action would not be difficult with or without the waiver of defenses provided in the Price-Anderson Act. Thus, the legal benefit given by Price-Anderson to those immediately injured in an ENO would be minimal, unless the lack of financial resources of potential defendants is a significant enough problem to justify a federally mandated insurance program whose maximum limits are so low as to deny those injured appropriate compensation. For those suffering diseases months to decades later, the difficult problem will be proof of causation. Usually no other element of proof will be difficult to establish. A plaintiff showing causation will be able to collect under negligence and/or strict liability theories. But causation will be a difficult proof problem because the legal system has often resisted using statistical and epidemiological data to prove causation.35 Thus, for those seeking compensation for radiation-induced injuries, proof of causation may be a considerable obstacle that could result in no compensation for injuries36 whether or not Price-Anderson is triggered by an ENO. It is clear that in 1987 potential plaintiffs are getting far less than in 1957.

An area of radiation tort litigation that demonstrates the difficulty in proving causation involves the United States atmospheric testing program in Nevada. Between 1951 and 1962 there were nine test operations involving 121 explosions, a few of which were underground explosions.37 Many plaintiffs sued the government under the Federal Tort Claims Act38 and the claims of 1,192 named plaintiffs were consolidated for trial.39 The trial encompassed 24 claims in their entirety that were selected by plaintiffs' and defendant's counsel as "bellwether" cases, for they represented typical factual and legal issues.40 The trial took 13 weeks and produced a 7,000-page transcript and 54,000 pages of exhibits.41 The 226-page opinion gave recovery to 10 of the 24 plaintiffs who suffered from leukemia or breast or thyroid cancer and met the required exposure tests. Those plaintiffs suffering from other diseases were denied recovery based on their failure to prove causation.

The Price-Anderson Act does nothing to deal with the causation problems that will face those whose injuries are manifested long after the public memory has faded. The Act as interpreted by the courts in the Three Mile Island cases is confusing and yet another obstacle to collecting damages.42 Moreover, those whose injuries are manifested early can exhaust the financial coverage before the full extent of those injured is known. The major conclusion that can be drawn from the host of cases relating to Three Mile Island is that it may take considerable time for plaintiffs to collect damages for injuries due to actions of the nuclear industry.

[17 ELR 10189]

The Effect of Price-Anderson

The Price-Anderson Act limits the liability of the electric utility as well as those responsible for the design and construction of the reactor. It also limits the liability of those who supply parts for the reactor, plus those not directly involved with the facility's operation, such as a negligent airline that causes an aircraft to crash into a reactor.43 Since the electric utility is a regulated monopoly with a massive investment in its plant, they have a substantial incentive to be careful despite the limits on liability created by the Act. This may not be the situation with those constructing the plants. Thus, the nuclear power industry has been singled out for protection from the behavior modification that might be engendered by the tort system.

The effect of the Price-Anderson Act is to make those living in proximity to nuclear power plants subsidizers (to the extent of the economic value of the uninsured risk) of electric power users who may live substantial distances from the plant.44 This led to a lawsuit that reached the United States Supreme Court. The Carolina Environmental Study Group, Inc., and the Catawba Central Labor Union, along with individuals that lived close to a proposed power plant, challenged the plant's construction and sought a declaration that the Price-Anderson Act's limitation on liability was unconstitutional. The United States Supreme Court held that the liability limitation was not irrational, as Congress, to promote nuclear power, could limit liability and the amount would be left to congressional discretion.45 They further said that the limit on liability does not encourage irresponsibility since nuclear safety is supposed to be insured by independent regulation. The equal protection arguments made in the lower court46 were not pursued on appeal, but the court nevertheless declared that any classification establishing liability limits was rationally related to the promotion of the nuclear industry.47

Critical Questions

Four fundamental questions come to mind and should now be considered: (1) Do we still maintain the goal of encouraging, promoting, and therefore protecting the development of nuclear power? (2) Is the possibility of a nuclear power accident remote? (3) Do we know what the consequences of such an accident would be, in human and economic terms? (4) How much could the utilities really pay?

Do we still maintain the goal of encouraging promoting and therefore protecting the development of nuclear power?

It now seems that there is a move away from the nuclear power push. Public sentiment and economics have merged to make further development unlikely.48 "The industry may have grown about as big as it is going to get. It has been seven years since a utility ordered construction of a new nuclear plant. During the last 14 years, orders for at least 101 plants were canceled."49

Various states have made moves to avoid relying upon nuclear power. In Oregon, a statewide referendum that would require the Trojan plant to shut down until a permanent dumpsite was licensed for the plant's nuclear waste was proposed, but was defeated.50 In Massachusetts, the Governor's rejection of emergency evacuation plans, required as part of the NRC licensing process, may prevent the licensing for the Seabrook 1 plant.51 In Ohio, the Governor has named a panel to study evacuation plans at the Perry and Davis-Besse plants.52 Finally, in Vermont, the Governor has stated that she wants to set nuclear safety standards for the Yankee plant that are stricter than federal standards.53

Outside the United States, similar actions are taking place. As early as 1980 in Sweden, "the then-ruling Social Democrats held a referendum, rare in Swedish public life, which resulted in Sweden opting to phase out nuclear energy by the year 2010;"54 this is particularly significant when juxtaposed to the fact that currently about 47 percent of their electricity is supplied by nuclear energy, as compared with 15.5 percent in the United States.55 Sweden's Prime Minister, Ingvar Carlsson, said that the Chernobyl incident "'has spread radioactive iodine and cesium over our fields, forests, moors, and lakes. We have been forced to take drastic measures that seem strange and frightening.'"56 In response, Sweden is currently considering [17 ELR 10190] hastening its exit from the nuclear power industry.

In the past few years the nuclear industry in the United States has come upon hard times. Runaway costs,57 more stringent safety requirements,58 and a generally poor economic climate for most of the electric power industry59 have virtually halted the expansion of nuclear power.60 However, predicting the future is difficult. In the 1950s the leaders of the nuclear establishment were predicting almost unlimited expansion that would produce electricity that would be too cheap to meter.61 They were wrong. But those who are confident of the demise of the nuclear industry are likely to be just as incorrect. Low oil prices could end at any time and make nuclear energy considerably more attractive. More rigorous air pollution controls on fossil fuel electric power plants could quickly change the desirability of this form of electric power generation.62 This is particularly true worldwide, where nations with more limited options for electric power production are aggressively pursuing the nuclear option. France gets 64.8 percent of its power from nuclear plants. Switzerland, Finland, West Germany and Japan get 39.8 percent, 38.2 percent, 31.2 percent, and 25 percent respectively from nuclear plants.63

Regardless of whether the nuclear electric industry expands, we now have 108 licensed reactors plus the facilities operated by the DOE. There are also 16 fuel fabricators, 32 nonpower reactors (including university reactors), 19 waste burial/storage sites, and at least 50 other miscellaneous nuclear facilities.64 Many of these facilities can be expected to be operating well into the next century. As they age the risks will increase. This means that the danger from presently operating reactors mandates a coherent federal policy that includes realistic compensation for victims of a nuclear accident. Without the continuation of the Price-Anderson Act we will not see any new private sector nuclear construction. But if we want such an industry, there is no valid reason for denying injured people the opportunity for realistic levels of compensation. In 1957 there was little knowledge concerning the costs of a major nuclear accident, but there was a strong policy of encouraging and protecting the nuclear industry. Today a policy more protective of the public would seem to be the appropriate role for government.

Is the possibility of a nuclear power accident remote?

One of the premises upon which the Price-Anderson system was developed revolved around the remoteness of an accident actually occurring. However, Nunzio J. Palladino, former chairman of the NRC, recently stated that "the probability of severe core damage in a nuclear reactor in the United States is 1 chance in 8."65 While an accident would require both a core meltdown and a failure of the container, this probability is chilling.66

Further, as has been shown from the examples of TMI and Chernobyl, human error can destroy even the best of systems. "'The plants are safe; it's the people who aren't safe,' said John Kemeny, chairman of the President's Commission on the Accident at Three Mile Island."67 Similarly, the official report on Chernobyl blamed the disaster on "[a] botched experiment and a series of deliberate safety violations, and a reactor that was inherently difficult to operate …."68

We must ask, then, is the possibility of an accident remote? And, are we legislatively doing all we can to promote maximum safety efforts? Senator Howard M. Metzenbaum (D-Ohio), in his statement before the Subcommittee on Energy Research & Development of the Senate Energy and Natural Resources Committee concerning the Price-Anderson amendments, stated that

as a Senator from the State of Ohio, these hearings are of great interest to me. My State has just experienced a very serious commercial nuclear accident near Toledo, and a major scandal involving the DOE Uranium Feed Material Facility in Fernald.

We must ask ourselves if the Price-Anderson Act encourages operators to do all they can to protect the health and safety of workers and the public. All indications are that the answer is a resounding "no."

Clearly the current law provides inadequate compensation and coverage, and offers little incentive for operators to accent safety in their operations.69

Do we know what the consequences of such an accident would be, in human and economic terms?

The first effort to quantify the effect of a major nuclear accident was the "Brookhaven Report" or WASH-740 published by the Atomic Energy Commission (AEC) in 1957.70 It estimated a 200 megawatt reactor located 30 miles from a major city could, in a worst case accident, result in 3,400 people being killed, 43,000 injured and about $7 billion in property damage. In 1964 to 1965, the [17 ELR 10191] WASH-740 study was updated to recognize the larger reactors then being constructed. The study assumed an accident involving a 1,000 megawatt plant and predicted 45,000 fatalities and 70,000 injuries. The study made no dollar estimate of property damage, but estimated the size of the area of such a disaster might be equal to the state of Pennsylvania.71

In October 1975, the NRC released a report entitled The Reactor Safety Study (WASH-1400).72 In that study, a worst case accident involving a 1,000 megawatt reactor would result in 3,300 early fatalities, 45,000 cases of early illness, and $14 billion in property damages. Long-term health effects would include 45,000 latent cancer fatalities, 240 thyroid nodules, and approximately 5,000 genetic effects in the first generation after the accident. This report was critiqued by the Union of Concerned Scientists in The Risks of Nuclear Power Reactors which claimed the risks were considerably greater than those stated by the NRC.73

The early NRC estimates may have been overly sanguine. The TMI accident, an incident during which there were small releases of radiation and which did not satisfy the NRC's criteria for an ENO, nevertheless resulted in significant costs.74 While, due to the small releases, it is "very unlikely to have any measurable physical health impact on the population," costs arose from many other sources.75 "Through February 1983, the District Court [for the Middle District of Pennsylvania had] authorized payment of $2.35 million to 10,993 claimants for evacuation and wage loss claims arising out of the accident and [was] in the process of reviewing all of the other claims that were filed."76

Since 1957, about $43 million has been paid for nuclear related third-party claims. Nearly all of this amount ($41 million) represents payments due to the accident at TMI. Payment by the Commercial Nuclear Insurance Pools for on-site property damage, as contrasted to personal claims during that same period, total about $488 million. This, too, is primarily due to the TMI accident.77 Finally, the TMI cleanup "has already cost $380 million, and is expected to reach $1 billion by the time it is completed possibly in 1988."78

A 1982 study done by the Sandia National Laboratory for the NRC suggested that in the worst possible circumstances, damage from an accident at the Indian Point Plant 25 miles north of New York City could exceed $300 billion.79

Chernobyl has also shown that the damages, actual costs, and accident and claims management can surpass our worst expectations.80 The Chernobyl accident "emitted as much long-term radiation into the world's air, topsoil and water as all the nuclear tests and bombs ever exploded ….,"81 and it is estimated to have done $2.5 billion in property damage.82 Even in Sweden the impact from Chernobyl has been unexpected and extraordinary. The "fallout from Chernobyl [has necessitated] the slaughter of thousands of reindeer and [has cost] the country, conservatively, 1 billion kronar ($145 million) so far …."83 It is now estimated that Chernobyl may cause up to 4,000 excess cancer deaths outside the Soviet Union in Western Europe.84 Other massive costs have been incurred as a result of Chernobyl. Plans have been set to follow the exposed population indefinitely.85 Further, "[i]n addition to cancers, the principal effects of radiation, there are also genetic abnormalities, teratogenic effects, and opthalmologic complications. The cancers that occur after exposure to radiation are generally similar to those that occur spontaneously; however, their incidence is increased."86

Assessing Actual Costs: The Health-Surveillance Model. Although we are uncertain as to the overall economic and human costs of a nuclear power accident in the United States, we are able to quantify one level of cost that would definitely be incurred. Medical surveillance of the exposed population would have to be performed. Although the price tag associated with this surveillance will be minimal relative to other costs, the following discussion intends to put the currently discussed liability caps of $2 billion to $6.5 billion into perspective.

The legal model we shall use is the government sanctioned health surveillance program found in the Superfund Amendments and Reauthorization Act of 1986 (SARA).87 Section 110 of SARA amended § 104 of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA)88 to include new provisions for monitoring the health of those individuals who are exposed to hazardous substances. The activities authorized by this section comprise the appropriate public health response for exposures, including exposure to chemical or physical agents such as radiation.89

[17 ELR 10192]

This government-sanctioned health surveillance program, which attempts to establish a mechanism for assessing the effects of an exposure to a hazardous substance on a population, can be used as a model for attempting to assess the response costs associated with a nuclear power accident. We know that a nuclear power accident would necessitate, at a minimum, identifying those individuals at high risk, monitoring their condition over time, and providing them with actual medical treatment. Since genetic injuries would be suspected, broadly based research programs such as those described under SARA would also be justified.

At the heart of this health surveillance is secondary prevention aimed at early diagnosis and treatment. Its general purpose is to

narrow down, from a broad population base, that smaller population of individuals who are defined to be at high risk for a specific disease and thus the most logical target for intervention …. [T]he goal is to determine excess risk of disease among populations and provide medical intervention at an early stage, thus reducing mortality and morbidity.90

The following steps constitute the mechanism by which the surveillance program operates: (1) establish the mechanism for basic administration of the surveillance program; (2) establish a baseline (this is accomplished through medical histories and physicals); (3) undertake epidemiological analyses to identify high risk groups for specific diseases; (4) pursue a longitudinal follow-up of the defined population including periodic repeats of the epidemiological analyses; and (5) undertake disease-specific medical surveillance.91

If this program were applied to a hypothetical nuclear power accident, and assuming an exposed population of 100,000, the cost of surveillance alone would be well over $450 million. This population size is based on the plans made following Chernobyl to monitor at least 100,000 people.92 The fact that some U.S. reactors, such as Indian Point in New York, and Davis-Besse in Ohio, are located near even larger population concentrations increases the size of the at-risk population and thereby drives up potential costs.

The first step that would be necessary to develop such a program would be to create a mechanism for the basic administration of the surveillance activities. This will include the hiring of physicians, nurses, and support staff, as well as establishing computer support.93 The estimated cost of this item for an accident of the range we are discussing is $500,000.94 It should be noted that once the mechanism is created, it will last into the future; as time passes, maintenance expenses may decrease or increase depending on the types of new diseases found that will require prospective population surveillance and medical monitoring.

The second step would be to establish a baseline for the exposed population through medical histories and physicals done on the entire exposed population. An estimated cost for this is $500 per person,95 bringing the total for this component to $50 million.

The third step would require that ongoing epidemiological analyses be performed to identify high risk groups for specific diseases. In Times Beach, Missouri, as a response to a dioxin contamination, the Centers for Disease Control spent over $750,000 on a pilot study to identify high risk groups. Thus, a conservative estimated cost for similar analysis in the event of a nuclear accident is $750,000.96

The fourth step would require a longitudinal follow-up of the defined population. This requires three phases. First, it is necessary to identify diseases for which there is excess mortality and morbidity. Second, analyses are done to determine high risk groups for those specific diseases. Since our 100,000 population is defined to be those significantly exposed to radiation, this entire group will have to be followed for 40 years or more.97 This population must be [17 ELR 10193] followed and monitored at least for leukemia and other hematopoiesis-related conditions. However, thethird phase is to take the information from phase two and use it for multidisciplinary surveillance studies of subsets of the population that are determined to be at high risk for specific diseases. The total cost of surveillance is subject to considerable uncertainty because it is unknown how many or which specific diseases will require targeting. If the entire population studied became very sick, the surveillance costs would drop as mortality increased, but the costs for required expensive medical care would soar. Moreover, if the study group succumbed quickly to the disease, the number of high risk people would increase because those not exposed sufficiently to be included in the 100,000 study population would have to be added.98 Since such factors make an estimation of these costs quite uncertain, the best estimate may be the costs actually incurred by the federal government in following other radiation-exposed populations.

More than 30 years after the end of World War II, the National Academy of Sciences, through the National Research Council, spends $10 million a year to follow 110,000 Japanese survivors of the 1945 atomic bomb blasts at Hiroshima and Nagasaki. The DOE also does health surveillance of natives of the Marshall Islands who were exposed to the radioactive fallout from a hydrogen bomb test in 1954.99 Thus, based on actual experience, the estimated costs of following the exposed population would be about $400 million.

The total cost of this surveillance program would thus be over $450 million. While this is not adjusted to the present value, that is not necessary since the Price-Anderson Act is not designed to provide money until needed to pay actual costs and compensation.

Many unknown costs remain and cannot be determined before the fact, because ultimately the cost absorbed will be based on societal considerations. How will we compensate for death? How will pain and suffering be compensated? How many bone-marrow transplants at $112,000 to $472,000 per patient can we afford to finance?100 While such questions remain unanswerable, what is known is that just the surveillance costs for a serious nuclear power accident come close to the present liability coverage and amount to a significant percentage of the cap proposed in even the most generous legislative bills.

Former Deputy Secretary W. Kenneth Davis, in a hearing before the House Science and Technology Subcommittee on Energy Research and Production in September of 1981, perhaps said it best when he stated:

Well, there have been a whole series of studies, starting with the famous WASH-1400, or whatever it was, in the early days, trying to assess the possible damages as the result of various kinds of nuclear incidents. These have been followed by a whole series of what I think you'd have to describe as speculations. It all depends on your assumptions, how serious you think the occurrence might be, and what its probability is. The result is we have ended up over the years with enormous ranges of estimates of what the potential consequences might be, a very great degree of imprecision and wide ranges in individual studies, a great deal of discussion about the validity of the studies, and I would say that the odds on anybody being able to come up with a definitive figure are extremely remote. We simply don't have a methodology or a way of arriving at the figures nor the criteria by which one ought to pick the figure.101

How much could the utilities really pay?

The amount of assets or the financial muscle of the electric power industry seems to be something of a mystery. Estimates run the gamut, from suppositions that an accident would bankrupt the industry to assertions that the industry could handle unlimited liability. A study done by the NRC suggests "that by far the majority of reactor licensees should be able to pay the proposed $10 million per reactor assessment with little difficulty."102 Further, for most of the utilities, "even $50 million in assessments for each of the three years evaluated could be paid from internal cash flow."103

Since the annual operating costs of a modern nuclear electric power plant run in the $500 million range, a maximum payment of $10 million per reactor per year would be about 2 percent of the operating budget of such plants.104 The $10 million figure has been the suggested maximum exposure to indemnification risk for the utility industry in several of the proposed bills. Existing property and liability insurance is running in the $4 million to $8 million range105 and much of that cost represents the property insurance component.106 Thus, insurance, both existing and proposed is but a small part of the cost of electricity.107

The proposed cap on indemnity is also small in relation to electric utility profits. In an NRC study of 34 utilities the average profit was $264 million per utility per year and dividends to stockholders averaged $224 million.108 The nuclear power industry, therefore, should be able to shoulder more of the costs.

[17 ELR 10194]

Proposed Legislation

Introduction

The following represents an overview of some of the recently proposed bills. The issues that should be considered in any such new legislation include: knowledge gained from Three Mile Island and Chernobyl concerning the increased risk from human factors; inflation that has decreased real benefits; the need for improvement of ENO determinations (more expedition, i.e., since the TMI determination took over a year, the determination should also be more formal and appealable); assessment of funds from other sources (i.e., manufacturers of parts, etc.); the desirability of imposing some liability on the federal government, and the immediate creation of a fund that would be available to cover immediate emergency needs. This final consideration would eradicate some or all of the retrospective payment plan and insure that money would be available immediately in the event of a disaster. Apparently, the following have been major areas of contention in the past: the amount of payments; coverage of DOE and their contractors; coverage for nuclear waste activities; subrogation; inflation adjustment; full compensation; unlimited liability; and legal fees.

NRC's The Price-Anderson Act — The Third Decade

In 1983, the NRC submitted a report to Congress entitled The Price-Anderson Act — The Third Decade. This report was mandated by subsection 170(p) of the Act and addresses the need for continuation or modification of the Act. The report states:

The Commission believes that the limitation on liability under the Price-Anderson Act should be modified to minimize the potential for uncompensated losses by the victims of a commercial nuclear power plant accident and to minimize the potential need for additional financial contributions by the federal government to meet public liability claims resulting from a commercial nuclear power plant accident.109

The NRC advocated an annual limitation of $10 million per reactor per incident on liability that would be collected each year until all the liability claims are settled. It would retain the first layer of private insurance and the ENO concept. Further, it would extend the statute of limitations to 30 years.

A majority of the NRC commissioners have more recently moved away from supporting the concept of unlimited liability advocated in the 1983 report. Instead, they believe that the legislation "should provide for a higher but finite liability ceiling for reactor licensees."110 The NRC also supports a detailed mechanism for presidential and congressional intervention if the damages exceed the liability limits, for both the commercial licensees and DOE contractors. Finally, it supports the Act covering all high-level radioactive waste transportation, storage, and disposal activities.111 The NRC stood by its earlier retention of the ENO language and the 30-year extended statute of limitations.112

In the 99th Congress there were many legislative proposals, but the second session ended without any new legislation.113 With the start of the 100th Congress came the introduction of S. 44 on January 6, 1987, by Senator Moynihan (D-N.Y.). This is similar to Senator Stafford's (R-Vt.) bill of last year, which was based on the NRC's 1983 recommendation to Congress. This bill would make each utility subject to a $10 to $15 million "retrospective premium" assessment for damages in excess of the $160 million in private liability insurance. Utilities would be responsible only after an accident happened,114 and the limits would be in January 1, 1987, constant dollars.115 Damages caused by an accident involving high-level nuclear waste would be compensated out of a generator-financed Nuclear Waste Fund.116 An interesting provision of this bill provides that the best 10 percent of the nuclear plants would pay 20 percent less and the worst 10 percent would pay 20 percent more. A panel of experts, such as the Accrediting Board of the Institute for Nuclear Power Operations would provide advice on this matter to the NRC.117

In the House of Representatives, Congressmen Udall (D-Ariz.) and Sharp (D-Ind.) introduced H.R. 1414 on March 4, 1987. This is identical to the compromise bill of the previous year, H.R. 5650, except for four substantive changes. They are: (1) an overall increase on liability limits to about $7 billion based on seven more plants coming on line since 1986. Each plant would have $63 million in liability, as in the 1986 bill;118 (2) there would be an automatic escalator requiring NRC to adjust the deferred premiums every five years for inflation;119 (3) the attempt in H.R. 1414 to provide authority to sue the government for injuries resulting from DOE's employees was abandoned (which preserves current law);120 and (4) this bill prohibits the litigation costs of defendants from being paid from insurance proceeds, deferred premiums, or government indemnity funds.121

The Udall-Sharp bill represents the mainstream of congressional thinking on Price-Anderson reauthorization. The primary layer of protection will be the maximum private insurance available — currently $160 million. The second layer of protection will be the deferred premium, but it will rise from $5 million under current law to $63 million. However, no more than $10 million per year can be charged each reactor. This amount will be adjusted every five years by the NRC to reflect changes in the consumer price index. If claims exceed the available funds, the NRC can borrow the money. If damages exceed aggregate [17 ELR 10195] limits on liability, the President must submit a plan to Congress for full compensation of all valid claims. Congress will determine what "full" means. Current law is preserved for NRC licensees other than large power reactors. Liability for DOE contractors involved in waste activities would essentially be unlimited. The defense costs for defendants would not come from the Price-Anderson funds. The statute of limitations will be five years beginning from the date the claimant first knew, or reasonably could have known of the injury. Injury due to sabotage at a licensed facility or an intended transportation route is covered, but accidents arising from nuclear material that is stolen are not. Price-Anderson coverage is extended to cover precautionary evacuations including reasonable costs incurred by state and local governments. Punitive damages paid for by the federal government would be barred. All claims arising from a nuclear incident, not just an ENO, would go to the federal courts.

In the Senate, a very similar bill, S. 843, has been introduced by Senator Stafford. The Stafford bill, however, does not have unlimited liability for nuclear waste accidents as does H.R. 1414. The Stafford bill also has a more comprehensive compensation plan and includes a section concerning indemnification for non-profit educational activities that is not in the House Bill. The differences, however, are far less important than the similarities; this is because both bills reflect compromises made over several years in earlier attempts to reauthorize Price-Anderson. Since there is substantial governmental and industry pressure to see Price-Anderson renewed, it is likely that the final version of the Act's extension will resemble this pending legislation.

This legislation is supported by DOE.122 Nevertheless, it has its detractors. Environmentalists believe H.R. 1414 has two fundamental flaws: it does not provide full compensation for accident victims, and it fails to include a mechanism for contractor accountability.123 The legislation is generally supported by the insurance industry, but the provision in H.R. 1414 to require defense costs to be assumed by defendants in addition to the limits of liability is strongly opposed.124

Conclusions

The approach by the congressional staff and the NRC seems reasonable. The debate concerning the desirability and safety of nuclear power will continue — as it should. The industry, after 30 years of depending upon the Price-Anderson umbrella, should not be closed down by the impact of lack of insurability. At the same time, nuclear power should pay its own way, which under existing law it does not. The major weakness of the present approach is that through the deferred premiums, industry management can avoid present insurance payments that other, less risky endeavors must pay on an annual basis. Thus, the cost of doing business does not reflect the cost of potentially varying levels of risk that might be reflected in insurance premiums. If an accident occurs all electric rate payers, nationwide, ante up the compensation. Management of the responsible utility, even if blatantly negligent, may not be held accountable. Contractors responsible for an accident would suffer even less, as their property is not destroyed by the accident nor have they any legal liability.

Present consumers of electric power are paying very little to provide insurance to cover the risks of nuclear electric power generation. The maximum private insurance available to electric utilities has been low for many years. When one considers that $2 million dollar umbrella liability policies are routinely available to executives, the $160 million in private coverage for the nuclear industry seems absurd. The Michael Jackson "Victory Tour" in the summer of 1984, for example, was insured for approximately $250 million.125 On television, advertisements regularly appear offering life insurance to senior citizens with no medical examination required. The reason that such coverage can be offered is that the benefit to cost ratio is very low. It is not necessarily the unavailability of insurance but perhaps the cost of insurance coverage that keeps the amount of private coverage low.

If the insurance industry is unwilling, even for increased premiums, to provide adequate liability insurance for large single event risks, the electric utility industry should be paying to create a self-insured fund. At present, the absence of adequate nuclear accident insurance is really a decision to allow present users of electricity to avoid paying the real costs of their energy. The proposed legislation exacerbates this problem by making neither the industry nor the customers pay to create a real insurance reserve. Perhaps this is why the increased coverage is supported by such a wide range of interests. No one pays, but the illusion of coverage is created. Since a serious nuclear accident [17 ELR 10196] will likely involve radiation injuries that will require treatment a half century after the accident, the proposed legislation imposes the costs of caring for those injured on generations yet unborn.

Fairness would dictate that present electricity users pay its full cost, including creating a pool of money that would grow over time to provide a source of funds to pay compensation. The proposed federal legislation is a mere promise to pay in the future, subject to being reversed by a future generation of voters. The pre-1975 Price-Anderson Act had an unrealistically low dollar limit, but at least that money would have probably been available. We are now moving to allow the nuclear industry to basically become uninsured and to depend on their customers' willingness to pay in the future for the money to compensate injuries. Few would take seriously a legislative proposal that automobile drivers would not have to have insurance if they promised to pay any claims after they had an accident. But, when the nuclear industry supports such legislation, it is considered a credible substitute for insurance.

Since the proposed liability will be imposed nationwide on future electric power users, this is not insurance. It is a consumption tax on electric power that will be triggered by an accident. Another large subsidy is to be given to the industry in a continuing effort by the government to avoid having the nuclear industry face the real costs of nuclear electric power. It is also another measure to insulate those responsible for accidents from financial responsibility. Nuclear contractors and utility executives can rest more easily knowing that neither they nor their employers will ever have to pay for their mistakes if Congress decides that the risks will be placed on the nation's electric power consumers — the group that has no power to make the nuclear industry safe.

1. Marwick, Physicians' Reaction to Chernobyl Explosion: Lessons in Radiation — and Cooperation, 5 J. AM. MED. A. 559 (1986).

2. STATE COMM. FOR USING THE ATOMIC ENERGY OF USSR, THE ACCIDENT AT THE CHERNOBYL AES AND ITS CONSEQUENCES (Russ. trans. Dep't of Energy, NE-40, App. 7, Aug. 17, 1986).

3. Chernobyl, The Lancet, July 26, 1986 (Round the World) at 212 (1986). Medical care in the Soviet Union is financed by the government. Field, The Modern Medical System: the Soviet Variant, in ASIAN MEDICAL SYSTEMS 82 (1976).

4. Approximately 36 hours after the initial explosion, a caravan of some 1100 buses was mobilized to the Chernobyl area and the entire population within an 18-mile radius of the plant — approximately 100,000 persons, including 25,000 to 30,000 children — was evacuatedover a period of three hours. All 100,000 people were examined medically and checked for evidence of radiation injury. Some 18,000 were referred to clinics and hospitals in the areas to which they were evacuated for more intensive checks, including chromosomal studies on a group of children. In all, thousands of studies to detect chromosomal abnormalities in lymphocytes were performed within the first week after the accident.

Geiger, The Accident at Chernobyl and the Medical Response, 5 J. AM. MED. A. 609, 611 (1986). The entire issue should be consulted for details regarding the medical care provided.

5. More than 300 medical staff members from Moscow Hospital Number 6 were involved in the care of the Chernobyl patients, in addition to those sent to the site in the initial response. Some 230 medical teams — totaling, in all, 5000 physicians and nurses — were sent to the Chernobyl region, or mobilized in the areas to which residents were evacuated, to conduct the medical examinations of the 100,000 evacuees. All five of the blood centers in Moscow were used to provide platelet and whole blood transfusions. The Soviet physicians pointed out that this effort strained the medical capabilities of the entire nation.

Id. at 612.

6. Telephone interview with Ira Dintz, Congressional Affairs, NRC (Feb. 26, 1987).

7. Pub. L. No. 85-256, § 4, 71 Stat. 576 (1957), adding Atomic Energy Act § 170, codified as amended at 42 U.S.C. § 2210, ELR STAT. 41233.

8. D. FORD, THREE MILE ISLAND THIRTY MINUTES TO MELTDOWN (1982); GAO, THREE MILE ISLAND: THE MOST STUDIED NUCLEAR ACCIDENT IN HISTORY, (EMD-80-109, Sept. 9, 1980).

9. STATE COMM. FOR USING THE ATOMIC ENERGY OF USSR, supra note 2.

10. Price-Anderson Act Amendments Act of 1985: Hearing on S. 1225 Before the Subcomm. on Energy Research and Development of the Senate Comm. on Energy and Natural Resources, 99th Cong., 1st Sess. 248 (1985) [hereinafter Hearings].

11. Id. at 341.

12. Statement of U.S. Nuclear Regulatory Comm'n Before The Subcommittee On Energy Conservation And Power, Committee On Energy And Commerce, U.S. House of Representatives 5 (July 17, 1986) [hereinafter NRC Statement].

13. Supra note 7.

14. Tomain, Law and Policy In The Activist State: Rethinking Nuclear Regulation, 38 RUTGERS L. REV. 187, 193-194 (1986).

15. U.S. NRC, THE PRICE-ANDERSON ACT — THE THIRD DECADE: REPORT TO CONGRESS A-1 (Dec. 1983).

16. Hearings, supra note 10, at 187. Frederick M. Bernthal of the NRC said: "[I]n modifying Price-Anderson, Congress should … consider mandating a system to provide the maximum possible expeditious compensation to victims of a nuclear accident — compensation unencumbered either by the failings of a deteriorating tort-law system, or by the inclinations of some practitioners of tort law." Id.

17. Early articles on the Price-Anderson Act included: Bangs, Price Anderson Act: A Half Billion Dollars of Federal Indemnity, 47 A.B.A. J. 1178 (1961); Bangs, Price-Anderson Act Revisited, in 1965 ABA SECTION ON INSURANCE, NEGLIGENCE AND COMPENSATION LAW 422; Cavers, Improving Financial Protection of the Public Against the Hazards of Nuclear Power, 77 HARV. L. REV. 644 (1964); England, Insurance and the Price-Anderson Act, 13 ATOM. ENERGY L.J. 27 (1971); Green, Nuclear Power: Risk, Liability and Indemnity, 71 MICH. L. REV. 479 (1973); and Seavy, Tort and Atoms, 46 CALIF. L. REV. 3 (1958).

18. Price-Anderson Act Amendments of 1986, Comm. on Energy and Natural Resources, S. REP. NO. 310, 99th Cong., 2d Sess. at 4-5 (1986).

19. Pub. L. No. 94-197, § 2, 89 Stat. 1111 (1975). The Act originally limited commercial nuclear licensees' liability to $560 million. Pub. L. No. 85-256, § 4, 71 Stat. 576 (1957). $60 million was provided from the maximum private insurance available; $500 million was a federal indemnity. The federal government also indemnified the Department of Energy's contractor-operated activities (then the Atomic Energy Commission) for its limit of $500 million. "It is important to note that, in the case of either licensees or contractors, the liability insurance was and still is 'omnibus' in nature, in that the utility or contractor accepts full liability for any claims against itself or any subcontractor or supplier involved in the accident." S. REP. NO. 310, supra note 18, at 4.

20. In 1958 the Price-Anderson Act was amended to provide coverage to the nuclear ship Savannah. Pub. L. No. 85-602, 72 Stat. 525 (1958); see also AMERICAN ENTERPRISE INST. LEGISLATIVE ANALYSIS, RENEWAL OF THE PRICE-ANDERSON ACT (1985). In 1961 the Act extended coverage to include the underground testing of nuclear explosive devices. Pub. L. No. 87-206, 75 Stat. 475 (1961). In 1962 foreign coverage of government contractors was added. Pub. L. No. 87-615, 76 Stat. 409 (1962). In 1964 the Act made clear that coverage would extend to facilities that receive a construction permit. Pub. L. No. 88-394, 78 Stat. 376 (1964).

In 1965, the Act was extended through July 31, 1977. Pub. L. No. 89-210, 79 Stat. 855 (1965). The 1965 extension also provided that government indemnity up to $500 million be reduced by the amount that the financial protection required exceeded $60 million, which was the liability insurance then available. U.S. NRC, supra note 15, at A-4.

21. U.S. NRC, supra note 15, at A-5 to A-6.

22. This total is derived from $160 million in private insurance and $540 million ($5 million X 108 reactors) in retrospective premiums. 42 U.S.C. § 2210(b), ELR STAT. 41233.

23. In 1975, Pub. L. No. 94-197, § 6, 89 Stat. 1111, 1113 (1975), a new § 170(e) to the Atomic Energy Act, 42 U.S.C. § 2210(e), ELR STAT. 41234. In 1965 the Joint Committee on Atomic Energy had said "[t]he limitation of liability serves primarily as a device for facilitating further congressional review of such a situation rather than an ultimate bar to further relief of the public." S. REP. NO. 454, 94th Cong., 1st Sess. 12 (1975), reprinted in 1975 U.S. CODE CONG. & AD. NEWS at 2262.

24. 42 U.S.C. § 2210(m), ELR STAT. 41235.

25. Pub. L. No. 89-645, 80 Stat. 891 (1966).

26. S. REP. NO. 310, supra note 18, at 4. There has never been a nuclear accident that has been denominated an "extraordinary nuclear occurrence." What little radiation-related litigation has occurred has been considered to be covered by state law. For example, in the famous Karen Silkwood case, the Kerr-McGee facility was not covered by the Price-Anderson Act at the time of her exposure in 1974. However, the U.S. Supreme Court made it clear that the Atomic Energy Act did not preempt state remedies. Silkwood v. Kerr-McGee Corp., 464 U.S. 238, 14 ELR 20077 (1984); see also Note, Silkwood v. Kerr-McGee Corp.: Preemption Of State Law For Nuclear Torts?, 12 ENVTL. L. 1059 (1982); Note, An Analysis Of Silkwood v. Kerr-McGee Corp. — Are Punitive Damage Awards And Exclusive Federal Regulation Consistent?, 36 S.C.L. REV. 689 (1985).

27. U.S. NRC, supra note 15, at A-4 to A-5.

28. See Allen v. United States, 588 F. Supp. 247 (D. Utah 1984).

29. 42 U.S.C. § 2210(n), ELR STAT. 41235.

30. Id. at § 2210(o), ELR STAT. 41235, provides that "[s]uch a plan shall include an allocation of appropriate amounts for personal injury claims, property damage claims, and possible latent injury claims which may not be discovered untila later time, and shall include establishment of priorities between claimants and classes of claims, as necessary to insure the most equitable allocation of available funds."

31. Faden, Price-Anderson Renewal Tests Nuclear Power's Maturity, 4 NUCLEUS 4 (1985).

32. Id.

33. 42 U.S.C. § 2210(i), ELR STAT. 41234, provides for the Commission to report to Congress if claims might exceed $560 million.

34. Hearings, supra note 10, at 198. Bernthal stated:

I think if we look at the history of Price-Anderson, I personally consider it highly unlikely, especially based on the precedents that have now been established by the Congress in respect to cleaning up chemical spills and messes in this country and in respect for example to compensation of various other injuries, I think it highly unlikely that Congress would simply assume and place on the taxpayer the burden of additional compensation should the limit of Price-Anderson compensation be exhausted. I consider that a very unlikely scenario, but I think it's a scenario that Congress might have to confront.

Id.

35. McElveen & Eddy, Cancer And Toxic Substances: The Problem Of Causation And The Use of Epidemiology, 33 CLEV. ST. L. REV. 29 (1984); Prince, Compensation For Victims of Hazardous Substance Exposure, 11 WM. MITCHELL L. REV. 657 (1985); Rosenberg, The Causal Connection In Mass Exposure Cases: A "Public Law" Vision of The Tort System, 97 HARV. L. REV. 849 (1984); Wright, Causation In Tort Law, 73 CALIF. L. REV. 1735 (1985).

36. Estep, Radiation Injuries and Statistics: The Need for a New Approach to Injury Litigation, 59 MICH. L. REV. 259 (1960).

37. Allen v. United States, 588 F. Supp. 247 (D. Utah 1984).

38. 28 U.S.C. §§ 2671-2680.

39. Allen v. United States, 527 F. Supp. 476 (D. Utah 1981).

40. 28 U.S.C. § 1337(a) provides that "[t]he district courts shall have original jurisdiction of any civil action or proceeding arising under any Act of Congress regulating commerce or protecting trade and commerce against restraints and monopolies."

41. Allen, supra note 37, at 258-59 n.3.

42. In Re Three Mile Island Litigation, 605 F. Supp. 778, 15 ELR 20400 (M.D. Pa. 1985). See also In Re Three Mile Island Litigation, 87 F.R.D 433 (M.D. Pa. 1980), and In Re TMI Litigation Governmental Entities Claims, 544 F. Supp. 853, 13 ELR 20122 (M.D. Pa. 1982), aff'd in part sub nom. Commonwealth of Penn. v. General Pub. Utils. Corp., 710 F.2d 117, 13 ELR 20639 (3d Cir. 1983). See also Stibitz v. General Pub. Utils. Corp., 746 F.2d 993, 15 ELR 20018 (3d Cir. 1984) for the court's confirmation that the Price-Anderson Act does not create federal common law causes of action and its adherence to minimal interference with state law. See also Kiick v. Metropolitan Edison Co., 784 F.2d 490, 494, 16 ELR 20544, 20545 (3d Cir. 1986).

43. See H.R. REP. No. 435, 85th. Cong., 1st Sess. 17 (1957).

44. The history of the electrical power industry is one of the industry building larger units and shipping electric power long distances. See S. NOVICK, THE ELECTRIC WAR: THE FIGHT OVER NUCLEAR POWER (1976).

45. Duke Power Co. v. Carolina Envtl. Study Group, Inc., 438 U.S. 59, 8 ELR 20545 (1978).

46. Carolina Envtl. Study Group, Inc. v. United States Atomic Energy Comm'n, 431 F. Supp. 203, 7 ELR 20315 (W.D.N.C. 1977).

47. The U.S. Supreme Court's opinion has been the subject of many comments. For a list, see Dickerson, Limited Liability for Nuclear Accidents: Duke Power Co. v. Carolina Environmental Study Group, Inc., 8 ECOLOGY L.Q. 163, 163-64 n.4 (1979).

48. U.S. NRC, supra note 15, at II-11.

Based on currently available information, no new nuclear plants can be identified that would receive construction permits after August 1, 1987, the expiration date of current Price-Anderson provisions. Under the terms of the Price-Anderson Act, even if the Act were to be allowed to expire on August 1, 1987, every reactor that was issued a construction permit before that date would be brought under the Price-Anderson system for the life of the operating license for the facility.

Id.

49. Fate of Nuclear Power Tied to Liability Law, CONG. Q. ENERGY, Jan. 25, 1986, at 154.

50. Paul, Oregon Referendum Shows How Concern Is Increasing Over Nuclear-Power Safety, Wall St. J., Oct. 10, 1986.

51. NRC is currently seeking to change the rules on emergency planning zones (EPZs) around all nuclear plants. A proposed rule called for site specific EPZs rather than the present 10-mile planning zones. Such an action could lead to a reduced EPZ for Seabrook thus allowing the plant to avoid the necessity of Massachusetts' approval.

On January 13, 1987, a draft rule was cleared by the NRC staff for consideration by the five-member Commission that would keep the 10-mile radius for evacuation planning but would allow utilities to meet the requirement by giving copies of an evacuation plan to affected governments. Thus no testing of the plan would be necessary and license approval could be granted by NRC even if state and local officials refused to participate in the evacuation plans. Peterson & Weisskopf, NRC Would Lift Barrier To 2 Plants' Start-Up, Washington Post, Feb. 6, 1987, atA4. The NRC by a 4 to 1 vote approved the rule change on February 26, 1987. Washington Post, Feb. 27, 1987, at A4.

52. Paul, supra note 50.

53. Id.

54. Winder, Swedes come unglued over atomic energy, Christian Science Monitor, Sept. 23, 1986.

55. Washington Post, Apr. 30, 1986, at A18.

56. Winder, supra note 54.

57. Cook, Nuclear Follies, FORBES, Feb. 11, 1985, at 82.

58. Stanfield, The Nuclear Option, National Journal, July 5, 1986, at 1646. This does not mean that nuclear critics believe NRC is strictly enforcing safety requirements. See, e.g., The Fading Dream of NRC Reform, 5 NUCLEUS 1 (1983); Kurtz, NRC Hindering Investigation of Nuclear Plants, Critics Say, Washington Post, Apr. 8, 1986, at A1; Weisskopf, Nuclear Safety: Is the NRC Complacent?, Washington Post, May 6, 1986, at A17.

59. J. LAITOS, NATURAL RESOURCES LAW 678 (1985); Pierce, The Regulatory Treatment of Mistakes In Retrospect: Canceled Plants And Excess Capacity, 132 U. PA. L. REV. 497 (1984).

60. D. ROSE, LEARNING ABOUT ENERGY 363 (1986); O'Connor & Carroll, Troubled Times for the TVA, NEWSWEEK, Jan. 27, 1986, at 23.

61. This phrase was coined in the incipient stages of the civilian nuclear power program. See Harrop, A Look at the Present Status of the Breeder Reactor Program: Power "Too Cheap to Meter," 5 ELR 50202 (1975). Its author was Lewis L. Strauss, Chairman of the AEC during the Eisenhower Administration. See also R. NADAR & J. ABBOTTS, THE MENACE OF ATOMIC ENERGY 28 (1977) (citing Milius, Major Battle Is Brewing on A-Plants, Washington Post, June 23, 1975, at A4).

62. There are currently before Congress several bills which would have this effect. See, e.g., S. 787, 100th Cong., 1st Sess. (1987); S. 796, 100th Cong., 1st Sess. (1987); H.R. 1664, 100th Cong., 1st Sess. (1987); H.R. 1697, 100th Cong., 1st Sess. (1987).

63. Washington Post, Apr. 30, 1986, at A18.

64. U.S. NRC, supra note 15, at B-6.

65. Energy Users Report (BNA), Current Developments, May 29, 1986, at 400.

66. But see Memorandum from Victor Stello to Chairman and Commissioners of NRC, re: Frequency of Severe Core Damage Accident, May 19, 1986.

67. Marshall, Kemeny Report: Abolish the NRC, 206 SCIENCE 796 (1979).

68. STATE COMM.FOR USING THE ATOMIC ENERGY OF USSR, supra note 2.

69. Hearings, supra note 10, at 62-63.

70. U.S. AEC, THEORETICAL POSSIBILITIES & CONSEQUENCES OF MAJOR ACCIDENTS IN LARGE NUCLEAR POWER PLANTS, (WASH 740) (1957).

71. UNION OF CONCERNED SCIENTISTS, THE RISKS OF NUCLEAR POWER REACTORS 3 (1977).

72. U.S. NRC, REACTOR SAFETY STUDY — AN ASSESSMENT OF ACCIDENT RISKS IN U.S. COMMERCIAL POWER PLANTS, (WASH 1400) (1975).

73. UNION OF CONCERNED SCIENTISTS, supra note 71.

74. Houts, Henderson, Cleary & Tokuhata, Utilization of Medical Care following the Three Mile Island Crisis, 74 AM J. PUB. HEALTH 140 (1984).

75. Id.

76. U.S. NRC, supra note 15, at A-9.

77. Hearings, supra note 10, at 27.

78. $380 Million and Counting, NEWSWEEK, Oct. 10, 1983, at 165.

79. 4 NUCLEUS 5 (1983).

80. Hilts, Chernobyl: Estimating The Fallout, Washington Post, Dec. 30, 1986, (Health) at 8-9.

81. Reactor Fallout is Said To Match Past World Total, N.Y. Times, Sept. 23, 1986.

82. Nuclear Industry's Liability Ceiling Firmly in Place, Washington Post, Oct. 10, 1986, at A3.

83. Winder, supra note 68.

84. Weisskopf & Smith, Chernobyl May Cause 4,000 European Deaths, Washington Post, Feb. 6, 1987, at A4.

85. Marwick, supra note 1, at 561.

86. Id.

87. Pub. L. No. 99-499, 100 Stat. 1615 (1986).

88. 42 U.S.C. § 9604, ELR STAT. 44011. This statute, usually called Superfund, was signed into law by President Carter on December 2, 1980. It provides for liability compensation, cleanup, and emergency response for hazardous substances released into the environment and for the cleanup of dangerous inactive waste disposal sites.

89. Under SARA § 110, codified at 42 U.S.C. § 9604, ELR STAT. 44011, the Administrator of the Agency for Toxic Substances and Disease Registry (ATSDR) and the Administrator of the Environmental Protection Agency (EPA) are to create a priority list of hazardous substances. From this list ATSDR shall prepare profiles that include interpretation of available toxicological information and epidemiologic evaluations. If information on the substances is not available, a program of research designed to determine health effects shall be initiated. Where possible, human data shall be collected. This work is to be coordinated with the National Toxicology Program and testing programs established under the Toxic Substances Control Act and the Federal Insecticide, Fungicide, and Rodenticide Act. 15 U.S.C. §§ 2601-2629, ELR STAT. 41335, and 7 U.S.C. §§ 136-136y, ELR STAT. 42301. Costs are to be borne by the manufacturers, processors, or parties potentially responsible for the sites.

For each facility on the National Priorities List, authorized by CERCLA § 105, 42 U.S.C. § 9605, ELR STAT. 44021, ATSDR shall perform a health assessment. The Administrator of ATSDR may perform health assessments for releases where individual persons or physicians provide information that individuals have been exposed to a hazardous substance. Individuals or physicians also may petition the Administrator of ATSDR requesting a health assessment. These health assessments shall include the potential risk to human health posed by individual sites and facilities, considering air, food, and water pathways. They should also consider the short-term and long-term health effects and any available recommended exposure or tolerance limits for the hazardous substances of concern.

If additional information on human exposure and associated health risks is needed, epidemiological studies, health surveillance programs or other means are to be used. Such studies can also be used to determine health effects on the population exposed to a hazardous substance from a release or threatened release. If a significant risk of adverse health is determined, a health surveillance program for the population shall be initiated. This program shall include periodic medical testing and a referral mechanism for those who are screened positive. If a health assessment contains a finding of significant risk to human health, the President shall take the necessary steps to reduce exposure and to mitigate the risk to human health. Federal facilities are subject to these requirements in the same manner as any nongovernmental entity.

90. Carlo, Health Surveillance Ground Hazardous Waste Sites: Conceptual Overview and Assessment (Report by George Carlo & Assocs., Inc., Falls Church, VA, 1985).

91. Carlo, Health Surveillance Ground Hazardous Waste Sites: Disease Specific Models for Estimating Costs (Report by George Carlo & Assocs., Inc., Falls Church, VA, 1986).

92. Geiger, supra note 4, at 612.

93. Id. In the Soviet Union,

[a] new national center is being created within the Soviet medical establishment to plan and direct the epidemiologic studies. A population register of all evacuated persons has been created, and all have been issued special cards to facilitate transfer of all medical data, for the rest of their lives, to a central registry. Plans are being made for a complex schedule of periodic follow-up examinations, including tests of thyroid function and for chromosomal aberrations in lymphocytes and cancer screening.

Id.

94. Carlo, Health Surveillance Around Hazardous Waste Sites: A Cost-effectiveness Analysis for Cancer Mortality, at Table I (Report by George Carlo & Assocs., Inc., Falls Church, VA, (1984).

95. This estimated cost of medical examination is far greater than a routine medical examination because of the variety and medical complexity of the diseases associated with radiation exposure. Not all of the exposed population would receive the same level of examination and thus the $500 figure is an average. See Carlo, Implementation Of Intervention Components of Multidisciplinary Health Surveillance; Selected Disease Specific Models For Estimating Costs (Report by George Carlo & Associates, Inc., Falls Church, VA, 1985). These figures also seem consistent with costs associated with the Agent Orange Studies performed by the federal Centers For Disease Control.

96. Id.

97. Radiation can increase the rate of occurrence of multigene diseases such as diabetes mellitus, atherosclerosis, schizophrenia, and rheumatoid arthritis. Thus, the argument could be made that medical surveillance should last indefinitely as injuries can continue into future generations. J. GOFMAN & A. TAMPLIN, POISONED POWER 86 (1971). It should be noted that the 100,000 people evacuated from the Chernobyl region will be followed and monitored for 40 years or more. Geiger, supra note 4, at 612.

98. If the number of seriously sick people increased the surveillance costs would also increase rapidly. For example, a full leukemia evaluation would include an anemia work-up, a kidney work-up, a liver work-up, chest x-rays, and if necessary a series of studies to differentiate leukemic types.

99. Kolata, U.S. Agencies May Be Shut Out of Chernobyl Follow-Up, 233 SCIENCE 147 (1986).

100. A total of 13 persons received bone marrow transplants after Chernobyl. Marwick, supra note 1, at 560. At a major U.S. hospital, of 21 patients seen during the fiscal year ending June 30, 1986, hospital charges associated with bone-marrow transplant, including the transplant itself, were $112,000 to $472,000 per patient. The length of stay was between 40 to 119 days. The majority of patients stayed 40 to 60 days. Personal communication with Paul Kramer, Executive Vice-President, Childrens Hospital of Pittsburgh, Mar. 1987.

101. Hearings, supra note 10, at 78.

102. Id. at 117.

103. Id. at 120.

104. Id. at 141-144.

105. Id. at 150.

106. Id.

107. Between 1957 and 1971 the industry standard premium for nuclear liability insurance was $33,034,000. Of this total, $18,378,000 was refunded. U.S. NRC, supra note 15, at B-23.

108. Davis, Nuclear Liability Bill Moving Toward House, Senate Floors, CONG. Q., Aug. 9, 1986, at 1829.

109. U.S. NRC, supra note 15, at IV-5.

110. NRC Summary Statement, July 17, 1986.

111. Id. See also NRC Statement, supra note 12.

112. Id.

113. Congressman Udall introduced H.R. 3653, 99th Cong., 1st Sess. (1985), on October 30, 1985, which was reported by the Interior Committee. This led to H.R. 5650, 99th Cong., 2d Sess. (1986), the Interior-Commerce-Science compromise bill. In the Senate, the major bill was S. 1225, 99th Cong., 1st Sess. (1985), introduced by Senators Simpson (R-Wyo.) and McClure (R-Idaho). This was reported by the Senate Energy and Natural Resources Committee. There were also bills introduced by Sen. Stafford (R-Vt.) (S. 1761, 99th Cong., 1st Sess. (1985)) and Sen. Metzenbaum (D-Ohio) (S. 2072, 99th Cong., 1st Sess. (1985)).

114. S. 44, 100th Cong., 1st Sess. § 1 (1987).

115. Id.

116. Id., § 4.

117. Id., § 1.

118. Id., § 2.

119. Id., § 15.

120. Id., § 4.

121. Id., § 4.

122. The DOE, in prehearing questions and answers to the Subcommittee On Energy And The Environment relating to the March 26, 1987, hearing, has stated:

If DOE's authority to indemnify contractors was discontinued, we are convinced that most current and potential contractors would refuse to do business with the Department…. We believe that this strong reluctance to do nuclear-related business with the government would extend to subcontractors, suppliers, and vendors who sell, design, build, test, or perform other work or services on any component of a nuclear facility or device since they are now covered under the omnibus, or "umbrella," provisions of Price-Anderson. The result would be the inability of the Department to effectively conduct its nuclear programs and fulfill its statutory responsibilities…. Since no DOE contract lasts more than 5 years, all 149 of these contracts will be affected on their expiration date if Price-Anderson indemnity authority expires and is not reauthorized before renewal of the contract. Because of the unique umbrella coverage provided by the indemnity (in that claims against any subcontractor, vendor, or supplier are channeled to the prime contractor), DOE does not include an indemnity clause in any subcontract. The indemnity clause included in the prime contract protects any subcontractors or other persons who may be liable for a nuclear incident in connection with the activity covered by the prime contract. In 1985, we estimated that 60,000 subcontractors were protected by Price-Anderson. We believe that estimate remains about the same today. Within the total of 149, DOE has executed 77 contracts with generators of spent nuclear fuel and high-level waste pursuant to the Nuclear Waste Policy Act. These contracts are included in the attached list although they do not contain an indemnity clause because they provide that the Department will include in its contract for the operation of any DOE spent fuel and high level waste facility an indemnity agreement based on the Price-Anderson Act. Such a contract would indemnify not only the operating contractor but any other person who may be liable for a nuclear incident arising out of, or in connection with, waste facility activities.

123. Testimony of Keiki Kehoe, Environmental Policy Institute, before the Subcommittee on Energy and the Environment, Mar. 26, 1987.

124. Statement of American Nuclear Insurers before the Subcommittee on Energy And The Environment, Mar. 26, 1987.

125. Hearings, supra note 10, at 257 & 274 (citing BUSINESS INSURANCE, July 16, 1984).

17 ELR 10185 | Environmental Law Reporter | copyright © 1987 | All rights reserved