ML19207B821

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Forwards Overview of Application of Price-Anderson Act to TMI-2 Incident,Discussing Present Facility Situation, Criteria for Determining Extraordinary Nuclear Occurrence, Administrative Law & Recommended Procedures
ML19207B821
Person / Time
Site: Crane Constellation icon.png
Issue date: 07/02/1979
From: Bickwit L, Shapar H
NRC OFFICE OF THE EXECUTIVE LEGAL DIRECTOR (OELD), NRC OFFICE OF THE GENERAL COUNSEL (OGC)
To: Gilinsky V, Hendrie J, Kennedy R
NRC COMMISSION (OCM)
Shared Package
ML19207B817 List:
References
REF-10CFR9.7 NUDOCS 7909050322
Download: ML19207B821 (52)


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6 a payment by the pccis pursuant to an insurance policy and includes claims which =27 require paynent by the Cc--*ssion pursuan: to an indemnity agreement after insurance policies have been enhausted by payment of claims arising cut of the sa=e incident."

Under this catescry of clai=s. the respcnsibility of the pocls is limited, after written request by the Cecnissien, to the investigation and processing of c1='-s.

The pccis will provide the Cc--* ssion with

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investigation, negotiatien, and any preposed settlenent, tcgether with a recen=endation as to the f airness and reascnabler.ess of any such preposed settlement.

W ij x O J D ' d

7

~MACEDINARE NECLEA? CCCG'P=ENCE -- C-5N??AL A.

Definition Webster defines the term " extraordinary" as " going beycnd what is usual, regular, er custemary.'*

Viewed in this light, the recent events at Three.'3.ile Islsnd may 'be terned extraordinarf, since they would not occur during noinal'cperations at a nuclear

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d and which the Cc =1ssion determines has resulted c.-

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discussed in detail below.)

In the event of a " nuclear incident" not declared to be an INO, Price-Andersen funds are available but State law defenses are not waived and the censolidated proceeding is..not initiated.

(Cases nay be consolidated, however, via the venue and receval crevisions aYplicable to U.S. district courts:

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the courts, and as discussed in the previcus section, have al-ready done se at TMI.

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Suecifics of the EN0/*dai*rer System When the Cer--'d ssion determines that an ENO has cecurred, then any defendant nust waive:

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v of equal significance to the waiver of defenses provisiens, is the Cc==ission's non-reviewable authority to deter 1.ine whether er not an DIO has cccurred.

The' criteria to be used by the Ccnmissien in dete.~ining whether an ETO has occurred will be fully discussed later, but at this point it should be reiterated that, absent an EIO, the waiver of de'enses previsiens do not apply.

In such a s1tuation a claima.t wculd have exactly the sane rights that he new w

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14 district courc.

Consclidation of all clains resulting fren an INC in a single Federal district ecure wculd prevent "forun shcpping" and permit all cl=d " p.ts to ':e treated equally.

Finally, the 1966 amendments =cdified the Act to assure that available funds wculd be distributed in accordance with a coure-approved plan taking appro-priate allowance for latent injury claims if it appeared that the aggregate d: cunt of all claims nighe exceed the limit en liability.

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4 A.

Lanzuare and Structu e of the Cri eria

?cr the CC"* ssion to.=ake the determination that there has been an extracrdinary nuclear occurrence, both Criterien I and Criterien II as set out in 10 CFR 140.34 and 140.35, respectively, nust be =et.

To satisfy Criterien I the CC:nissiCn nust det a""' - a that there has been a substantial discharge or dispersal of radic-a 4..a.

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of radiaticn cffsite, when, as a result of an event Cenprised Of

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included:

(1)

Radiation face sou~ces exter:a1 Oc the bcdy; (2)

Radicactive =aterial that may be taken into the bcdy

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The Cennissicn finds that $2,500,000 or nore of da-age offsite has been or will probably be sus-tained by any one persen, or $5 nillion or nere of such da-oge in the aggregate has been or will prob-ably be sustained, as the result of such event; or (3)

The cen ission. finds that $5,000 er nere or do-=ge offsite has been or will probably be sustained by a.ach c*

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As requ' red by the 196c amendnents discussed in Secticn III, tha Cwed s a.d e n p.-a.c. ara.d. ar.d.c ub l.* s h.a.d "c "

ub _'.'

c a.

=..=.^w - b.a.

w w.

c.~.d 'w..- d _=

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.d.. d e c.d a _d..g w".a 'w ".a.." a r.uw.7 a w=.~

_d.a.c.d a

dent was an " extraordinary nuclear occurrence" as defined in the statute.

Cn May 9, 1968, the proposed rule and accccpanying State-(.t,, 3 7 3. d.

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c w,, c w'.e a, e."d. e d c.' - u"e.' d c w-.w.- =.n.,

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w

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was published on September 1, 1968 with an effectite date of Dece:-

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" extraordinary nuclear cccurrence", for they were arrived at with other pu pcses in mind, and these Id 'ts have been set at a level which is conserva-

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sa'ety facter.

Thus,. a discharge or dispersal which exceeds the 11=1ts in AEC regulations, or in license conditions, although possible cause for concern, is not one which weald be expected to cause substantial injury or damage unless it exceeds by scme significant nultiple the apprcpri-a.

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separate from AEC health a.d safety regulations, and, of course, the selection of these values will not in any way affect such regulations.

A substantial discharge, for purposes of the criteria,

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discharge values are set so 10w that it is 2,.. a.,..f ur..' _# k = _' f..".a d a m..e - a. c. '. ' e. '_.= ". u _' d " a.

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seCCnd part Of the test, to nake a determination n

u n

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probably result, they CCuld vary frCn de nind

's to serious, and the w'aivers will not apply until the danages, bCth actual and probable, Can be determined to be " substantial" within the seCCnd

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4 yu.-yCse C" -o'<'..-

s the dete ninatiCn, the dose CalculatiCns nay be nade.withCuC regard tC whether persons were actu-a_,_,f,

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With respect to the physdcal injuries to persens

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C. d ' e. _d e r. 7 _-~

  • k. e.*.a.' a.". '.

tion based on obj ective evidence of injuries due to the expcsure to the i adioactive, toxic, explosive, er other haza-dous properties of nuclear material and withcut reference to other types of injuries.

For the purpose of this determinatien, the Cc= mis-sien will nct take into acccunt psychological effect or injuries not due to exposure to hazardous properties of nuclear caterial.

The latter categcry wculd include, for example, physical injuries ac,,s. _ e d,_,.4.. e-.

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a,., o c...c o _4,.

evacuation.

Since there would not be cbjective evidence of physical injury due to "expcsure",

a persen whose only injuries were sustained in such an accident would not be included as counting toward one of the 10 pecple nenticned in Criterion

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o the area althcugh they were nec requested to do so.

Undcubtedly such evacuations caused both personal expenses and business lesses in areas as far away as Earrisburg.

A detailed assessment of all icsses of this type might reach the $5 million figure of Criterion II, though much wculd depend on how hreadly the varicus da se categories of this criterica were interpreted.

It appears unlikely that voluntary payments by the insurance pccis will reach this figure.

  • he a cunt reccverable in the various court acticns is virtually i= pes-sible to estimate at this time.

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. a The Cc==ission can apply the criteria flexibly wichcut running afoul of adninistrative law dcctrines.

It could not, however, cheese J

to ignore the criteria cr interpret then in a naa.ner inconcistent with.the statute.

It is a settled principle of a+d nistrative law

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binding upon the bcdy that issues it."

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a Nader Judge Gesell also noted that, as a corollary Oc this

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Id. (. citations cnitted).

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In United States v. *i e f f n e r,

220 ?.2d SQ9 (.4th.Cir. IC70) the ccurt stated:

These [abcVe-cited] cases are censistent with the d c c ',. "'_.". e ' s y t'.'" c s e

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1201en cf its cwn precedures.

As the Second Circuit said in==

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9 27 We agree also that the [?ederal Cenntnicaciens]

Cc==issien proceeding must be recpened for anccher reascn.

Agency acrden that substancially and pre-judicially violates the agency's rules cannet stand.

(Citations ccitted) 269 ?.2d at 224 r

The Cen=ission in this case is therefere bc md by che criteria of Part 140 in deciding whether or not Three Mile Island is an extracrdinary nuclear occurrence.

The Cor 'ssion does have, cf course, considerable discretion in interpreting its own regula-tiens, see Northern Indiana Public Service Centany v.

Forter County Chacter of the I:aak Walten league, 423 U.S. 12 (IC75), sc long as that interpretation is "reascnable" and "cen-sistently..apelled".: /

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Will af*ect che public perceptions of the Cennission as well as the Cr=nission's relations with Cong ess, with the nuclear indust:~/, and with these previc ng ' rice-Anderson insurance coverage.

The finding of an 32I0 wculd be approved by sc=e, c.

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The practical censequences of declaring an ENO in this case are 1*-tted.

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[7590-01]

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Chapter 1 - Nuclear Regulatory Cc==1ssion PART 140 - FINANCIAL PRCTECTION RE UIRE'4ENm3 AND INDEMNITY AGREEMENTS Section 82 - Procedures Pursuant to its authority under Section ll(j) of the Atetic Energy Act of 1954, as a= ended, 42 U.S.C. 2013(J), e.nd acccrding to Subsection 140.82 of its regulations, 10 CFR 140.32, the Cc==ission hereby initiates the making of a determination as to whether or not the recent accident at Three Mile Island, Unit 2, constitutes an extracrdinary nuclear occurrence ("ENO").

Althcugh no petitions requesting such a determination have as yet been received, the Con =1ssion is aware of several factors which indicate that proceeding with the determination at this time is in the public interest.

First, it is clear that the events which have taken place at Three Mile Island, Unit 2, constitute the

=cs sericus nuclear accident to date, and thus shculd be riger-,

cusly scrutinized from the standpoint of their effect on the public.

Second, varicus lawsuits have been brought concerning this accident, and the determination of whether or not an extra-crdinary nuclear cccurrence has taken place is pertinent to issues which nay arise in these cases.

The ccurc has informally asked 7he Commission for its view on the INC question, and the Cennissicn would like to assisc the courc in this regard.

, -,.--.-,.m

.4.. 4 'v.~ U. t. d O.s.a" w] T ). I Ce !

v.~

2

[7590-01]

The Cc==ission invites interested persons to submit Oc the Commission, within thirty days of this anncuncement, any infor-nation in their possession relevant to this determination.

Submittals should, if pcssible, focus en the application of the Cc==1ssion's regulations, 10 CFR 140.84 and _40.85, to the consequences of the Three Mile Island, Unit 2, accident.

This information, along with other information assembled by the Cc==issica frcm its cwn and other sources, will be considered by a panel composed of Cc==ission principal staff as required by 10 CFR 140.82(b).

The cc= position of this panel, and the detailed procedures which the Cc==ission prepcses to follow, including further provision for public participation, will be anncunced at a later date.

Sub=1ttals should be sent to the Secretary of the Cc==ission, U.S. Nuclear Regulatory Ccmmis-sien, 1717 H Street, N. W., 'Jashingt on, D. C., 20555 CCNTACT:

Ira ?. Dinicc, 301 t92-8336.

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c=

.: =

.=-

EACKGRCUND MACERIATS S u.n.m.. v :.v.

_.a -

I.

The StatutcEg and Regulatory Scheme fer Inde nificatica and L3 i_tatica of Liability The liability limitatica ender review in this case' is

. art cf a cen=rehensive statutcry'schene set cut in Sectica 170 of the Atemic Energy Act of 1954, as amended, 42 U.S.C.

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other hazardous properties of source, special nuclear, or byproduc

=aterial...."

,/ 42 U.S.C.

2014(q).

Under Sec-tien 101 cf the Atc=ic :nergy Act construction er operatica or a nuclear reacter =ay not begin until the Cc

  1. ssion issues a constructica. permit er an operating license, as acc. roc. riate.

42 U.S.C.

2131.

Subsection 170 (a) 42 U.S.C.

(Supp. V) 2210 (a), requires licensees t: =aintain public liability financial protection of such type and ancun'a as the Cc==issicn shall require in accc dance with subsection 170b.

The Cc=:..ission may require as a further concitica

-- e..see exe - -

a.

.. e.- v, ag-a=-.~e.'

.i.. ac o '#-

"'a i d i"

'u". a '* ' ". a ance with Subsection 170c and that the licensee waive any bi.'.i' 4.-" #~~f c..#e

-ad 5.v. s'.a'= c# # eda-=.'

'aw.

'"S.a s e

,4, p cvisions are interrelated with the li=itatica en aggregate liability in Subsection 170e so that '.he cc=bined financial

.crotect:.cn and overn=ent '. nce=n' tv. sur. ::.ce to cover t.u.e

=axi=u= liability which =ight be incurred in a nuclear 4

C.4 4 en'-.

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Subsection 170b directs that the required 'finan-3; =

=

cial protection for facilities designed to produce sub-te=

[=

stantial a= cunts of electricity shall be the amcunt cf r-

.y This liability insurance available frc= private scurces.

G insurance of the te ancent is c.efined to include both "=. rimary" y

e E

tve. e cbtainable frc= crivate insurers E and "secondarv. "

t-financial protecticn pr.evided in accordance with a retro-E=

hv the e

sc. ective.creniurt plan imposed en the nuclear industrv.

-_=

5 Pub. L.94-197 (39

~

1.975 amend =ents to Subsectica 170b.

Q c-i""

.i.n g

S'.a'.

' ' ' ' ) (.'.o 7 5 ).

U.. der t*.e e'-as:ac'-'~<e - em c_-.=...,

c the event of a nuclear incident causing damages exceeding t-r r.:

the required primary financial protection each licensee of 5

(electrical) or a cen=ercial reacter rated at 100 Megawatts E

ci t

E F

I Primary insurance requiraients may also be net by E

2/

self-insurance, other private contractual indemnities,

~

p ccf cf financial respcnsibility, or a ccmbination of

'~

Since inception of the Price-Andersen

'n such neasures.

all of the pcwer reactors licensed to cpe-a

Act, excess of 100MW(e) have satisfied the primary financial

.crotectica requirement through the purchase of the

" facility form" colicv. issued bv the two nuclear e n e r e. v. liability. insunance e.ccls, Ncclear Inerev.

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y

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=cre would be ascessed a prcrated share of danages up to $5

=illion per reactor per incident.3/

Subsection 170c. requires that when th'e primary and secondary financial p ctection required of a licensee totals less than S560 millica the Cc==ission shall agree to

. inde==ifv and hold harmless the licensee and anI other

~

c. ersons inda--i "ied f cm public liabili tv. arising cut of

'the licensed activity which is in excess of the level of financial p ctection required of the licensee.M,This inde=-

nity requirement applies to any p cduction or utilication 3/

Subsection 170b. provides that the Cc==ission shall fix this maxi =um a= cunt between the limits of $2 million and 55 million.

In a recent rule =aking the Cc=nission selected the upper limit cf $5 million with the additicnal c..c.v. iso as allcwed by subsection 170b.

that no nere than S10 millica per calendar year shall be charged.

10 CFR 140.11(a) (4) as effective August 1, 1977.

42 Fed. Reg. 46 (January 3, 1977)..

_4./

When the required p ctacticn exceed 5560 =illica it autccatically becc=es sufficient to ccva-aggregate

a

___uwe,.

._ a____u_.

3 _s a_

42 U.S.C.,

s ue_ :.

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~

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f acility for which a construction permit is issued between August 20, 1954 and August 1, 1987.3/

The term " person indemnified" is defined to include in addition to persens with whcm an indemnity agreement has been executed "any c'he-e sc...5.c..'v. 5.e 'iab'a "--

ub'ic '4a"414'v.,"

a.. i 4..g o-e

-e-y out of the nuclear energy hacard. 42 U.S.C.

2014 ( t).

The 13

...4,ar:..=.-.> s e r..d = v 4..s uranc e,

--.%= '".e geva.

a.t'.'s inde=nity ac.reements cover not cniv the licensees but also r

any other persen whc nay be liable.

10 CTR 140.9.1r Section 1 0 C '.. '.', O. 9 '.)., ~ - ' ~.

m. a a g r.= cl' o'.
  • '.e ' i ab.i. ' i 'v.

coverage is thus "canibus" in nat.re, extending t any persen against whom a claim might be ledged regardless of

' ". a.i d e..' 4 ".v.

c '. '".e y e_~a w~.1

'i

- ab la_ c _- ~ =-.i = ' i c..s "..4. ' o '". a licensed activities er the nuclear incident.

Ccverage includes any nuclear incident in the course of transporta-

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ue_ '.o

'm" a_ - a-c- s.i ' a, 4.. .a

-s s.,

y= - a_ c e,, e,

a" 'he si'a, 4-

'".e c e -*.i c# "".e -aac'-

4..c.i di..g w

discharges of radioactive ef fluents, in the storage of

..c

=_-

was es =^

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, =~

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cu-in Subsecnicn 170 f.,

'70g.,

and 170h.

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3..d a~ wca.

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e ls...

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a. =.=.4.*2< -

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c

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J.E. 4

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4

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w.

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=

81 w.w

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4

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,UC_,e_.

4. 4. - L e.o. u. 4s set a. $.00

._433_4 n,

. t...w4s.3_4m4u 4

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at,.u..

a _4

, 7 v - = duc ed "v,

'ba anc u..

'b.= ~w u

-a e protection (both primary $tnd secondary) exceed $60 million.

Thus as =cre cc==ercial reactors are licensed and these new licensees participate in the retrospective premium system, Gcvern=ent indemnit.y will 5raduallv be. chased out and will u

4.,., '.e wh e.*.

'm'.e

,e = ~,r _i.ns u a..c e _' a.v a - a.A

' k. a.

=' o-s=ective.cremius lav.er together provide a total of $560

=illion in financial crotection.

The Cc==issica has esti-980 '"e c _4.arv a..d s e,.~..d = _-v_

.#..s

_~ '-..c e

..ta ' a d ' b.a ' 'v required of a licensee operating a =ajor nuclear reactor will exceed $560 million and that bv. 19 85 it will exceed a

S1 billion.

See S.

Rep. No.94-454, 94th Cong., Sess. 26 (19 I

).

mo'- _'_i

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g,," s a c '-i,.. ' 'e O e.

a ac. -. =. : a ' a.

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a

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required of licenseest whichever is greater.

42 U.S.C.

(a'"q=y=y.

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k. o...s. 4.=..a g = c e _4.. a

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tion provided by the ret:cspective premiu=s.

Subsection


.e.

f.. v -es "('.]'a' e ava..'. c' u'.uc'a=-

i

""~'"

170e.

n w

incident involving damages in excess cf that amount of aggregate liability, the Congress will thercughly review the particular incident and will take whate.ver action is deened necessarv and a: crc.=riate to.crotect the cublic frem the consequences cf a disaster of such magnitude."

  • Ibid.

to

n. e. rov:.,es :or wa vers c: ce:enses Subsect..c n

.3 /

facilitate recoverv. bv. clai= ants.

"his subsection authc -

4., a s '". a C-i ss. ion 'o -ac.

i-a

-- visi

..s i.n.4..su

=..ca w

policies and indemnity agreements whereb.v. licensees waive c-di..a e " -' de#a..ses c oss45'a 4...m

.4"4es wi""

.as ec"-

to any "extrac dinary nuclear occurrence, " defined as an event causing substantial off-site discharge cf radicactive c_"#-si'=.6

". ".. e ", a d ". a - - a.x ' =..~.

d,..a 3 e '-.., y e s c.~.o c

,--- e-v,

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e nV within twentv. v. ears follcwin an extracrdinary nuclear occur-rence a clai= ant would need to prove within three years of the discovery only that he er his property had been damaged and that the damage had been caused by the occurrence.

These waivers are incorperated in the standard insu ance and indernity agreements set cut in the Cc==ission's regulations, 10 C:TR 14 0. 91, 140.92.

These agree =ents include, pursuant to Subsection 170s., previs cts to establish "cccrdinated

c. rocedures for the erc==. t handlin2 o investi5atica and o

settlement of claims for public liabilitv. "

42 U.S.C.

2210m.

Subsection 170m. also authorices che Cc==ission and other indertnitors to na'ce i..=ediate emer encv assistance v

payments to aid claimants follcwing a nuclear incident.

It the United States district court in the dis-

~

trict where a nuclear incident cccurs deter.ines upon the e '-4 c. c # a.v.

i.. der ~._i ' c c

  • .. '. a - a s '- = d - a a e n . ' ' -" k ' i c liability =ay exceed the limitatica of subseccion 170e',

then under Su.bsection 170c, total payments by inde nitors cannet exceed 15 per cent of the dcation without prior t

court.

42 U.S.C.

2 210 c. (1).

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" priorities between clai= ants a=d classes of clai=s, as necessary to assure the = cst equitsble allocaticn of avail-able funds."

Subsection 170p. recuires the Cc-ission te stih 4 t to the Congress by August 1, 19 83 a detailed report concern-i=g the need for continuation or ncdification of the provi-siens of Sectica 170.

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W(9"~Mk In 1954, the Congress determined dat it was in de b

A History of the Price-Anderson Act

]

h e

gt g national interest to recede from exclusive government t

yg j

ownenhip of nuclear facilities, and to encourage de wide-

. bgg spread civilian applications of atomic energy in medicine, I

'$@--%y,,

agriculture, and industry, panicularly in de genera:ica cf E;

eleenic power. It fur 6er detennined to do so through de r

  1. s W M private seecr. (P.L 33-703, ss 1-3, 42 U.S.C. !s 2011-w#MW

'013 )-

.w m qw In the late 1950's, se pramount obstacle to de 6 25

%%M :' i development of nucler power was de uncensin econon-sagT$

ics of the technology and hence de lack of economic M'35$T4 incentive forindusev to make substan:ial commitments as

{$j Congress desired.1 secondary, but substantial obstacle y

[

was the unresolved liabill:y question. In 1957, Congress g

'N:sswt

-~

N

-found dat both suppliers (including designers, manufac-I' C.. - %<

turers, and construe: ors) and users (primarily electic 3

g.g utu,..nes) of nuc.,er power for ty.e generation of e.,ect:c::y were unable or unwilling to make funher substan:ial s;

gq; 1.

investment in dis 6en : w technology wiecut some resoluCCn cI thelf pCtennal 11abih.!V CXposure 1.n :nc M*

(c unlikely event of a Irge nucler accident. (H. Rep. 435, 2'

&g 35th Cong., 1st Sess. (1957), repnnted in "Selec
ed E*fM=

Nfaterials on Atomic Energy Inde=nity and Insurance F

$44 Legisla: ion", Joint Commit:ee on A:omic Energy, Con-1 x

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E M"

.}

fec:ss et :ne L. ited States, Niarca.

m n

19,,.nere=aner uSe-

.f- --es i

2 ed hfatenals"' at 234 et req.)

"M 1:

$n m j

Dunng de same pericd, tecnnicn! s:udies had been g

o-p; i

puclished wi:n respem :o -"- -~~ cf damages which

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=

$7. M.c:::e

~

S cculd be caused under unfavora' le circums:ances by a c:

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--~.c w

Cs Ulated nucler acciden!, and eXpen cpinions repcGed m

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  • o de effect dat the chances were exceedingly small that hN such large ac= dents would cccur.

Also, studies were W

undertaken of claims exposure and how coceensanon to h

i the pubhc would be provided under existing law in se j]

,, g g event or a nuclear acddent. One of dese studies con-N-

,,,,,,,,",,g

));'d -

duded both that the liability exposure was unprecedented r

and that, wuhout a governmental program, "one cf 6e

?

M@

,eddne, si cast results f a se:ious accident could be dar.

l-

.ation of k

n =bers or the pubhc in large numbers would have to

E:m auEh'5e

^

bear a major sham of the losses". (" Selected Matenals"*

~01k-I q'

fuptc,at 238-239, 340, 557).

u l

y--
to the Accordingly, in 1957, after extensive hea ngs, review.

or vancus proposals, and debate, de Pnce-Anderso-N

cenom.

t

enomic l

amendments to the Atomic Energy Act of 1954 were Q

f enacted as necessary and appropnate both to encouraee N

nents as 3

6e parnc:panon ofindusry in de development of nuc: ear D

obstacle

.E j

ecnic power and to assum that funds would be availabl-9M

engress

>f.g for compensation of!=Jured =e=bers of the public if an M

tanufac.

N ace: dent were to occur despite all precautions (F) R.ch M

electic 435, 1957, supra, and P.L 85-256, adding, inte ectncity

stantisi subsection 2.1. and s170 to the Atomic Energy Act of 195$

M FA 42 U.S.C. !!2012(1) and 2210 (1957).

n some I

,@~._ c in the I

@d

p. 435, l

ice oo) cave to encourage private investment and l [

ielected j

invclvement was served by making the indust y's ex.

l posure ascenainable and limited to premiums for ins $.-

.surance ance and fees for govemment :=demnity.

The Pn y, Con.

er "Se.

Anderson amendments thus (a) c eated a situation where

,.i:;fd a large antount of liability insurance could be m"*"'-

~A 7

and written 'oy stock and mutual insurance comp 2=es

$"3'5 u", e _--

operating mIcugn two pools, (b) subtituted gove-- e 11 M

t, M-. d W

indemnity fer e:nosure of de assets of t wn7acle.o i watcn ts by a Claims in -xcess of {nsurance and (c) limited L

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epen-d ment :=de==ity and de underlying liabili:y er wgeme. ;

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r%g. --:, i 3 might be liable such that the sum ofinsurance (den S60 a

g' i i !

million) and govemment indemnity (then 5500 million) y e

y was the limitaden ofliability Sgure. (H. Rep. 435, aprc.)

c 3

M-7 i

e The objecdve of assuring that funds would be avail-

[

1

+-

egp able to pay daims was served primadly by (a) requinng r

$*'M licensees of cower reactors above a nommal protervpe size (f.p%g to maintain dnancial protecnon equal to the max: mum amcunt of commercially-available nudear liability insur-

,\\

.weg ance in a form approved by the Commission, (b) provi-r N E26 ding govemment inder tnity up to an amount which, while M

^:

$MM not open-ended, was such that even if an accident were to C

kM-- Me occur causing damages well up in the range or esnmates or s:

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potennal damages made on the most pessimhdc assump-p tions, compensaton would be adequate, (c) making the i:

i @~ %m g. t.

insurance and m. de=m.ty "ommbus" in nature, dat is, r:

pg J payable irrespeedve of de privity of de person liable to 3

li the contract ofinsurance er indemnity, so dat to become s'

y N g '_

liable was to become insured, (d) providing the rudiments i D E

b%@:4 of a system of daims administration and (e) retainmg de y

i fMW Hexibility, through limitatica ofindemnity and liability, to provide by legislation an altemative administrative com-2 L[4;.3 pensation scheme for excess daims if an accident causin[o 1-(

2 more than S560 million in damages were to cccu g.e (H. Rep. 435, (1957) mpre.)

p-m.e The Pnce-Anderson amendments as onginally

@" m enacted provided for their appucadon to h.eenses issuen 2:

4;

=. D.~

prict to August,19c /. inus, c 196 ' o':':, t.b.e quesdon of o;

4 QM ["

de extension of de applicaden of 6e law to later facilities 2;.

haw was studied,2nd a ten-year extension was enacted in 1965 ct CA

( P.L.39-210, amending, imer. c!!c, 42 U.S.C. ! 2210, C

,3

%e

"?@$2:&

su'esec. (c) and (e)). _ine unntacon en.,22cmty was axec 3

1 i

at an uc. cer =ut or xc0 mn..h.en = 2:n:npanca et 1

M fr...y-WM

=c eases = is insurance com;cnent abcve 560 :n!!!ca

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!i and with de hope dat government indemnity nught thus 4-FE$g4+

n 560 n

liion)

I eventually be phased out (P.L 89-210; S. Rep. 650, 89th Il- @ [N epra. )

i Cong.,1st Sess., ( 1965), repnnted in "Seleced Af aterials" g

(! J mpra at 290-291). Among the criticisms of the original fh M.

@ @Q avail-law aired in 1965 was dat, by leaving de entire liability c: ring l

regime to state tort law, the Congress may have failed to j

{.

provide the intended assurance of compensation to injured g $p e sine tmum members of de public (S. Rep. 650 rupra, in "Seleced 6LW

nsur-

[

Afaterials" rupra at 292-293).

Specifically, Assocate j

I3". g

rovi-Dean Cavers of Harvard Law School had published a law G)+rg while

,r review article which urged, as he also tes:ified before the ys sre to Congressional Joint Committee on A:omic Energy, that QM tes of s:ric: liability would not necessarily be applied, at leas:

9 % w=n Q

ump-promptly, ab imno, in all j.unscictons: tnat ac s of God or se,-Ag g de intervening ac:s of dird parties or ch2nrable or govern-

[ gg at is, mental immunities might defeat stric: liability of the SM..M le to licensee, and sat relatively shcr: statutes of limitation

  1. v:

9 4

(

A

',)l' nught bar some recoveries (Proposed Ex:ension of AEC Tdh. t m

come Indemnity Legislation: Hearings on H.R. 5496 and S.

Ee.$

nents t.

.g 6e 2042 Before the Subcommit:ee on Legislation, Jcint Corn-N0$$

ty, to mit:ee on Atomic Energy, 89th Cong.,1s: sess., (1965) at

"%m&S ccm-211-223, 396-440).

h

sing

'gg tcur.

In fur 6erance ofits original obje=ive to protec: de d4

~

public, in response to the en:icisms aired in 1965, and "g3.+n

. ;::n consistent with i:s reluc:ance to displace s:2:e law direc!y tily by wri:ing federal tor: law as such, de Congress enac:ed "W'a ed an elabora:e scheme of =anda: cry, self-execunng waivers

.w

~w%

or or detenses in 1966, w... men had the en_em or_ crean_ng gpg is absolu:e liability for any subs:2sti21 nuclear accident and g3~

5 otherwise respended to de concerns expressed by Dean

(-)

Cavers and others (P.L 89-645, amenciing 42 U.S.C.

gg'3 7_ -

3 2210, subsec. (e), and adding subsec. (m), (a), and

$d (c) dereto; 5. Rep.1605, 39th Con =o., 2nd Sess., (1966),

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l!l In the same 1964-6ts pericd, quesdens were raised before the Congress about de consd:utionality oflimi:a-

$g tion on liability (Heanngs on H.R. 3496 (1965), mpra at i

p = M--

113-130). It was concluded in view of dec:sions regar-

>$ cS q M g $

ding, inter alla, state and federal work =en's com-y "g g pensadon laws, that Congress had ample power to enac:

gj the law and that,if any "quidpro quo"were requi ed, such

{q.,ggg;;-

was amply provided by =andatory insurance, by provid-MhpPA ing government funds to pay c! aims, and by de "om-g=m,As.%

meus, feature (S. Rep. e,:.0, (1963) mpra in ',Selec:ed

-~t mt ggg Materials" mpra at 236; Herings (1965) en H.R. 8J96, s.mn;EMA mpra, Appendices 40 and 41 at 441-456).

1TgM Again in 1974-1975 the quesden of ex:ending de

'WR Price-Andersen Ac: to facilities licensed sr'll later was pMN535 considered along wid a number of 2.!ternative approaches W W[

with regrd to inde=nidcation. The ex:ensien and funher hhE amendments were adopted (P.L 94-197 amending, inter p

g j#

igs alia, 42 U.S.C. ! 2210, subsec. ( b), ( c), ( e), ( f), ( h), (i),

M 8~.r-WcM (n) and (o) and addin=o subsec. (p); H.Re<.94-648, 94th

[ g. d w e-g ]a Cong.,1st Sess., (1975).) Among signidc2nt additicas a

were (2) to ex:end the statute et hmitations waiver even

_9 furSer, (b) to establish a second, pcoled self-insurance U.... d layer of liability insurance (initia.lly underlying residual g#.

A government indemnity) which would (i) phase out gov-g'O ernment inde=ni:y ev-- -(a ex: few yers as =cre e *-

gM_giy,g dary layer of insurance) and as primry insurance capa-facilities were licensed (dus inc easing de pccled secen-b "pgMMy

  1. [

city increased and (ii) den allow de limitaden ofliability gr g

' M-to "ficat" upwrds (it =ay double by de =id-1980's if M--- fM M.-

+n faci.. des ne b.eensen arc pnmarv msurance capaci:y is ar9

-T M M,%

increased as expeced), and (c) to exn. ressiv. sta:e ist, if M. A:;f2itSt de limitatica a= aunt were ever :: ached, Ccng ess would A

3

.; A m_ s e take apprcpriate acnen wii re= erd to excess cla:.=s.

r se m

ph @h

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( Atomic Energy Ac: of 1954, Subsec:icn 170.

as

+TCwD.e%-

amencied, 22 U.S.C. i *.210(e).)

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