Up & Atom


With the change of a single number, Congress has provided continued support for the nuclear power industry by renewing the Price-Anderson Act. Congress amended Section 170 of the Atomic Energy Act of 1954 (commonly known as the Price-Anderson Act or PAA) by changing its expiration date to December 31, 2065 from December 31, 2025. Congress also increased fourfold the liability coverage for DOE contractors for a nuclear incident occurring outside the United States to $2 billion from $500 million. Finally, Congress revised the definition of “nuclear incident” to remove requirements for the underlying nuclear material.

The PAA was originally enacted in 1957 as part of the development of the commercial nuclear power industry. Congress has extended the PAA several times, most recently in the Energy Policy Act of 2005 for an additional 20 years through 2025 while modifying certain elements of the framework. The DOE and the Nuclear Regulatory Commission (NRC) are authorized to administer the PAA for DOE contractors and NRC licensees, respectively.

As background and relevant to the nuclear power industry, the PAA establishes a comprehensive statutory scheme designed to meet two main policy objectives. The first is protecting the public against losses from personal injury or property damage arising from nuclear incidents involving the design, construction, operation, or maintenance of nuclear facilities or the possession, handling, or use of nuclear materials. The second objective is to encourage the development of the nuclear industry by imposing a statutory limitation on the total commercial liability arising out of a nuclear incident and indemnifying any person or entity who might otherwise be liable.

As administered by the NRC, the PAA generally covers accidents or malicious attacks occurring during the following:

  • Transportation of nuclear fuel or materials to a covered site
  • Storage of nuclear fuel both pre- and post-irradiation
  • Operation of the reactor and any radioactive emissions or effluents
  • Transportation of nuclear fuel or materials from a covered site for disposal

To do so, the PAA and NRC’s implementing regulations establish a two-layered framework in which power reactor licensees must participate to ensure sufficient funds are available to cover potential third-party liability. The “primary” layer consists of a site-specific insurance policy and the “secondary” layer provides for retrospective pro rata premium assessments from other reactor licensees to cover the public liability for claims and costs in excess of the primary layer. The PAA also serves as the mechanism to meet the US government’s obligations under the Convention on Supplemental Compensation. Lastly, the PAA sets the procedural requirements to assert a claim for compensation based on harm caused by a nuclear incident.