US nuclear liability premiums adjusted

15 July 2013

The cost to US power companies of covering insurance liability for potential nuclear accidents has risen by 8%. The new rates were set by the Nuclear Regulatory Commission to take account of inflation.

Based on the Price-Anderson Act, the US nuclear power industry has about $13 billion in liability insurance protection to be used to compensate any public harm in the event of an accident at a nuclear power plant. This insurance protection consists of two tiers: The first provides $375 million in liability insurance coverage per incident, and the second provides for a further $12.6 billion per incident if required.

"The Price-Anderson Act is consumer- and public-oriented legislation," said a briefing from the American Nuclear Society, "It provides a substantial amount of insurance protection paid by the commercial sector at no cost to the public or the government."

Under the Atomic Energy Act of 1954, the NRC is required to adjust the maximum total and annual standard deferred premiums specified in the Price-Anderson Act for civil nuclear liability for inflation at least once every five years. The last adjustments were made in September 2008, and the NRC has now published its latest adjustments, based on March 2013 consumer price index figures. The maximum total deferred premium increases from $111.9 million to $121.3 million, while the maximum annual deferred premium rises from $17.5 million to $19.0 million.

The premium applies to each power reactor with a rated generating capacity of 100 MWe or more. However, if utilities have two or more reactors with capacities between 100 MWe and 300 MWe located at a single site, but with a combined capacity of no more than 1300 MWe, those units will be considered as a single reactor for the purpose of assessing the applicable financial protection required.

The NRC has now published its final rule on the adjustments in the 12 July issue of the Federal Register. The rule becomes effective on 10 September 2013. 

Researched and written
by World Nuclear News

Filed under: Liability, Energy policy, USA