On March 23, 2024, President Biden signed a bipartisan funding bill into law that includes a 40-year reauthorization of Nuclear Regulatory Commission’s (NRC) and Department of Energy’s (DOE) indemnification authority under the Price-Anderson Act (PAA or Act).
The PAA was enacted into law on September 2, 1957, as section 170 of the Atomic Energy Act of 1954, as amended, and addresses liability resulting from nuclear incidents in the United States, and, to a more limited extent under DOE’s program, overseas. The twin aims of the PAA are to: 1. protect the public by ensuring that funds are available to pay valid liability claims, and 2. encourage participation in the commercial nuclear industry by providing a stable and predictable liability framework. Both NRC and DOE implement portions of the PAA to ensure that funds are available to pay public liability claims flowing from nuclear incidents.
A key provision of PAA––the authorization for the NRC and DOE to indemnify licensees and contractors––was set to expire at the end of 2025. This authority has been extended multiple times since promulgation of the Act, most recently for 20 years through the Energy Policy Act of 2005.
Both the NRC and DOE supported reauthorization of the indemnification provisions of the PAA in their respective reports to Congress. For example, the NRC concluded that the PAA 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.” Likewise, DOE concluded that continuation of its indemnification authority is “in the best interests of DOE, its contractors, its subcontractors and suppliers, and the public.”
The recent amendments to the PAA reauthorize NRC and DOE’s ability to indemnify licensees and contractors through December 31, 2065. The amendments also increase in DOE’s authority to indemnify contractors for work outside of the United States from $500 million to $2 billion; and, through a revision to the definition of the term “nuclear incident,” remove the requirement that source, byproduct, or special nuclear material used outside of the United States be owned by, and used by or under contract with, the United States in order to indemnified under DOE’s program.
The total amount of financial protection provided under the Act for the current operating commercial nuclear power fleet under NRC’s program is approximately $16.1 billion per incident. Notably, this amount is provided through the primary and secondary layers of a privately funded insurance program administered by American Nuclear Insurers (as opposed to a government indemnification). Under the DOE’s program, financial protection is provided through indemnification in the amount of approximately $16.6 billion per incident occurring in the United States and $2 billion per incident occurring outside of the United States.
