Talk:Price–Anderson Nuclear Industries Indemnity Act/Archive 5

message: In all this edit warring, everyone seems to have forgotten about specifying (a) that it is an Act of Congress in the United States and (b) what year it was passed in, in the intro.  Morwen - Talk 08:38, 29 November 2005 (UTC)
replies: text: what, include facts? Sandpiper 09:50, 29 November 2005 (UTC)
replies: text: Some of the problem with doing that is that the conglomeration of statutes now known as Price-Anderson has been changed and added to by several other acts of Congress over the years. So while the initial language was enacted in '57, there have since been several other bills enacted to add to/modify the language as "Price-Anderson Act Amendments."  If we're goign to use that level of specificty (mostly with the year I guess), then we'd also need to mention all the other times it's been modified, since we're describing the law as it currently works. Or perhaps mention that it was first enacted in '57. Something like that. · Katefan0(scribble) 15:46, 29 November 2005 (UTC)
replies: text: Well that's been an issue for awhile now. Because of all of the POVness, we haven't really been able to finish this article as it should be finished. I mean we've spent...what...2 months now on just the opening paragraph? --Woohookitty(cat scratches) 19:54, 29 November 2005 (UTC)
thread_title: Context

message: Because Price is a tool to address risk, it is incumbent that we express the risk. I have proposed we use the phrase "risk is higher than industry will accept. I think it is veryfiable and accurate, and while it doesn't say what the risk is, it defines it as accurately as is known. Benjamin Gatti 00:21, 2 December 2005 (UTC)
replies: text: Why bury a new section in the middle of the discussion page?  And we've been over this before, and it's already treated in the consensus Intro. Simesa 00:49, 2 December 2005 (UTC)
thread_title: Defining risk

message: I have provided two sources which assert that the purpose of PAA is to address catastrophic incidents. It seems the case that PAA would not exists if the only threat of nuclear was an odd accident (of the TMI type) The concerns of congress, and of industry leading up to the PAA all contemplate the worst case scenario - and do not express the need for special legislation to address common industrial accidents.
Can we agree that PAA is an insurance scheme to cover the potential of a catastrophic nuclear incident?
# YES Benjamin Gatti 00:29, 2 December 2005 (UTC)
replies: text: We've been over this before as well.  To imply that PAA covers only catastrophic incidents is incorrect. Simesa 00:51, 2 December 2005 (UTC)

text: That seems about the average for Benjamin's contributions. · Katefan0(scribble)/my ridiculous poll 15:29, 2 December 2005 (UTC)

text: It doesn't matter who said them. It depends how you use them. Shields implying something you hide behind; catastrophic implying something bad is going to happen as a result; taxpayer backed implying cost is shifted to the taxpayer and it will cost people money; victims of negligent and careless implying this is about protecting negligent and careless people, it is not and supreme court agreed; place burden on taxpayer, which the supreme court said it did not; criminal malfeasance, implying again the intent is to shelter criminals, also elsewhere explicitly said it is not as it is is merely protection from civil damages, and not even that since payment is made by the companies as well if not better under this act than otherwise, supreme court agreed. I havn't checked out which agency allegedly said this was a subsidy, so I don't know if this accurately represents their view, but I still suspect that the majority of the population is perfectly happy with it. You can't place a claim here which does not represent the balanced truth. This is a summary, you can explain at greater length later that various groups disagree with the majority opinion.Sandpiper 08:14, 2 December 2005 (UTC)

text: I agree that this version is POV.  Again, the point of Wikipedia is not to tell of all the bad things that might happen in the case of a nuclear attack.  The point is to give an accurate representation of the law itself, taking into account nothing about our opinions on its effects on people, civil suits, or anything else.  Furthermore, the first paragraph of an article is, by definition, meant as an introduction to a topic, not a means to bombard the user with confusing statements.  Look at John F. Kennedy — the first paragraphs, while they do mention some positive and negative aspects of his presidency, they only give an introduction into the rest of the article, and the Cuban Missile Crisis, Bay of Pigs invasion, and all other events are discussed in detail later in the article.  I think everyone on both sides are forgetting that the first paragraph of the article is not supposed to be a dumping ground for everything we can say about Price-Anderson.  All the first paragraph should do is explain the subject, and slightly hint toward the rest of the article.  Ral315 (talk) 18:01, 4 December 2005 (UTC)
thread_title: Catastrophic Intent

message: The Atomic Energy Act Amendments of 1954, three years before Price-Anderson, was intended to spur the development of America's private nuclear power industry by allowing private industry to use atomic power for peaceful purposes, such as generating electricity. Prior to that act, the government had held a monopoly on the use of nuclear power. 
Private industry responded to the Atomic Energy Act of 1954 with the development of an experimental power plant constructed under the auspices of a consortium of interested companies. It soon became apparent that profits from the private exploitation of atomic energy were uncertain and the accompanying risks substantial. Although the AEC offered incentives to encourage investment, there remained in the path of the private nuclear power industry various problems - the risk of potentially vast liability in the event of a nuclear accident of a sizable magnitude being the major obstacle. Notwithstanding comprehensive testing and study, the uniqueness of this form of energy production made it impossible totally to rule out the risk of a major nuclear accident resulting in extensive damage. Private industry and the AEC were confident that such a disaster would not occur, but the very uniqueness of nuclear power meant that the possibility remained, and the potential liability dwarfed the ability of the industry and private insurance companies to absorb the risk. Thus, while repeatedly stressing that the risk of a major nuclear accident was extremely remote, spokesmen for the private sector informed Congress that they would be forced to withdraw from the field if their liability were not limited by appropriate legislation. 
To address this issue, the congress introduced the Price-Anderson act in 1957. This had the dual aim of removing the exposure of plant operators to unlimited financial risk in the event of a nuclear incident, but also to maintain or improve protection for the public. This act obliged companies to obtain $60 million of insurance cover against accidents, and provided an additional pool of $500 million from government funds to cover any losses not covered by the insurance. The companies were not liable for any further amounts. This act was intended to be temporary, and to expire in August 1967.
It became apparent that the industry would still be unable to obtain insurance privately, so the act was extended for a further 10 years in 1966. A provision was added which prevents companies from offering certain kinds of of defence to actions involving nuclear accidents. This was intended to make the process of suing a company easier, and to remove discrepancies in different states where different laws applied. It only applied to incidents where a significant escape of radioactive material was deemed to have occurred (an ENO, extraordinary nuclear occurrence).
In 1975 the act was again extended, up to 1987. The total amount of insurance remained the same, but a provision was added for each of the 60 or so reactor owners to contribute between $2 million and $5 million in the event of an uninsured accident. Insurance requirement for each individual company was increased to $140 million. These measures reduced the contribution of the federal government to the insurance pool. However, an explicit commitment was made that in the event of a larger accident, Congress would 'take whatever action is deemed necessary and appropriate to protect the public from the consequences'. 
In 1988 the act was extended for 15 years up to August 2002. Individual insurance for each generator was now increased to $200 million, and total fund to $9.5 billion. For each reactor owned, a company was liable to contribute up to £63 million towards compensation for any claim against any company, though this could only be recovered at a maximum rate of £10 million per year. Assessments were to be adjusted for inflation every 5 years. The same level of indemnity was provided for government DOE facilities, while small reactors (education and research) were obliged to obtain £250,000 insurance and had a government backed pool of £500 million in the event of accident. The act provided for all cases resulting from one incident to be heard in a federal court, rather than local courts. 
In February 2002 the act was extended to December 2003. It was extended to 2017 after some debate in 2003. The individual insurance for each site was increased to $300 million while fund contributions per reactor were increased to $95.8 million. In 2005 it was extended again  to 2025.
The constitutionality of the Price-Anderson Act was challenged in 1975 (Duke Power vs. Carolina Environmental Study Group, Inc.) and upheld by the Supreme Court in June, 1978.  The suit had challenged the act on two grounds — first, that it violated the Fifth Amendment because it did not ensure adequate compensation for victims of accidents, and that it violated the Fourteenth Amendment because it treats nuclear accidents differently to other accidents.  The court found: 
*it is clear that Congress' purpose was to remove the economic impediments in order to stimulate the private development of electric energy by nuclear power while simultaneously providing the public compensation in the event of a catastrophic nuclear incident. 
*The record supports the need for the imposition of a statutory limit on liability to encourage private industry participation and hence bears a rational relationship to Congress' concern for stimulating private industry's involvement in the production of nuclear electric energy.
*the Price-Anderson Act does, in our view, provide a reasonably just substitute for the common-law or state tort law remedies it replaces.
*The District Court's finding that the Act tends to encourage irresponsibility in matters of safety and environmental protection cannot withstand careful scrutiny, since nothing in the liability-limitation provision undermines or alters the rigor and integrity of the process involved in the review of applications for a license to construct or operate a nuclear power plant, and since, in the event of a nuclear accident the utility itself would probably suffer the largest damages. 
*We view the congressional assurance of a $560 million fund for recovery, accompanied by an express statutory commitment, to "take whatever action is deemed necessary [438 U.S. 59, 91] and appropriate to protect the public from the consequences of" a nuclear accident, 42 U.S.C. 2210 (e) (1970 ed., Supp. V), to be a fair and reasonable substitute for the uncertain recovery of damages of this magnitude from a utility or component manufacturer, whose resources might well be exhausted at an early stage.
*There is no equal protection violation, since the general rationality of the Act's liability limitation, particularly with reference to the congressional purpose of encouraging private participation in the exploitation of nuclear energy, is ample justification for the difference in treatment between those injured in nuclear accidents and those whose injuries are derived from other causes. 
Ok, I have inserted a new paragraph actually stating the date of PA and explaining the second reason for it, to improve compensation arrangements. Next, a history of each reenactment and what changed. Then, expanded the final paragraph reporting of the supreme court findings about the act. I have a problem in that there seems to be no mention of appeal against the 14th amendment. Was this quietly dropped, or is there another judgement as the one referenced deals with the appeal against the 5th? I think a new subsection break is needed immediately before staring to talk about the supreme court case. e.g ---Constitutional Challenge---. I think the relaxation of time limits to sue was in the same year as the removal of certain defences from companies, but I'm not sure. I also didn't find a reference to what just happened in the last renewal.Sandpiper 13:36, 1 December 2005 (UTC)
replies: text: Impressive research!  I believe the Act simply failed to cover all facilities licensed from 2002 to 2005 (it still covered all facilities already licensed).  Making a section break there sounds good.  The last renewal is covered in a reference to Energy Policy Act of 2005,  Title VI Subtitle A (all of Title VI is Nuclear, as is Subtitle E of Title IX). Simesa 16:02, 1 December 2005 (UTC)
thread_title:  Background section 

message: Does anyone know what laws regulate insurance companies, and to the point of our article, whether in fact they might be forbidden by law from insuring events beyond their ability to pay out? This might go to the heart of the issue here, exactly  how insurance companies decide they can insure for $300 million, or whatever the exact sums have been in the past. Also, that they might conceivably effectively be forbidden by statute from offering to insure the nuclear industry as a whole. 86.141.58.72 19:17, 2 December 2005 (UTC)
replies: text: I've posted a question in Insurance.  I'd ask American Nuclear Insurers (based in Connecticut), but you have to do that by snail mail.  A partial answer is in . Simesa 21:12, 2 December 2005 (UTC)
replies: text: It's not fully relevant either way for this reason: Insurance is a third party tool to address personal liability. Personal (ie corporate) liability extends to net worth - but not farther - it was the unwillingness of Industry to expose their own net worth to the risks of nuclear energy which brought on Price - Insurance companies merely provide the service of risk amalgamation. Benjamin Gatti 00:52, 3 December 2005 (UTC)
replies: text: However the industry has been willing to accept a scheme whereby they provide $10 billion of insurance risk per incident spread amongst all of them. This suggests they do accept that the financial risk is acceptable once aggregated. Most industries proceed without bothering with vast insurance. Sandpiper 10:27, 3 December 2005 (UTC)
thread_title:  Insurance Companies 

message: Hi ben, I noticed your slight amendment to the the opening paragraph. It has the merit of being, i would judge, literally true. However, I suspect that 'perceived risk' is truer, because the actual risks are unquantified. I am begining to think (see above query) that the real problem is the scale of the liability, rather than the precise risk. It also strikes me that the biggest hole in the PA act, is the fact that in the event of a truly awful accident, the underwriters of the insurance (the other power companies) could well themselves be in no financial condition to pay their contributions...having just been closed down. Still, I suppose it should be possible to squeeze $100 million from the wreckage of each company. After all, closing them all down at once would cause unacceptable electricity shortages.
To return to your most recent edit. The change has to be read in context of the rest of the paragraph. I might even consider it fair to slip the word 'catastrophe' into this clause, if it was saying something along the lines,'possible financial exposure from a worst-case disaster'. Ah, I have slipped 'possible' back in subconsciously, because it also needs to be clear it is a small risk of a really big problem. It is clear to me that congress has dismissed this risk as negligible: what is not clear to me is whether it really is. But the question here is whether this change would then make the paragraph acceptable to you, or whether you would insist upon further changes which would skew its meaning. 86.141.58.72 19:44, 2 December 2005 (UTC)
replies: text: Congress did not dismiss the risk, they contemplated and made explicit plans for it. I contest your unsourced assertion that he risk is "small", insignificant" or merely "perceived". The risk - such as it is - is a substantial barrier to the privatization of nuclear energy. Were it in fact as slight as you say - I can't imagine why it would be a real impediment. I think you don't get to have it both ways. It is large enough for industry to walk away from nuclear energy. That is pretty large really. Think of the risks of say - building an automobile, or a pacemaker, or a prescription drug. These are all large risks which industry will accept - Nuclear risk apparently is higher than those. That can hardly be dismissed as "perceived".
There is a small probability of a catastrophic nuclear incident - the risk (as in the term "risk/reward") is higher than industry (and investors - who measure risk/reward) - are willing to accept. I will insist on such language. Benjamin Gatti 00:49, 3 December 2005 (UTC)
replies: text: The noun 'probability' presumably has the same derivation as 'probable', but also encompasses the opposit meaning,'improbable'. It simply denotes a mathematical evaluation of the likelihood of an event. so a small probability risk may in fact be highly improbable. And I repeat, while the various lawmakers have discussed at very great length what is to be done in the event that this 'improbability' might take place, it is wholly explicit in their discussion that they do not expect it ever to happen. I can not realistically believe any set of lawmakers would deliberately legislate for nuclear power if they believed one of the reactors was actually going to explode. So, all this hot air is about something no one expects to happen. The alternative is that the legislators have created a clean up program for a political disaster which they expect to have to face, and politicians just do not do that sort of thing. Sandpiper 09:51, 3 December 2005 (UTC)
replies: text: Not so, Nuclear incidents are expected at a rate of something like one every 10 thousand reactor years. With a thousand reactos, the chances are 1 in 10 for a given year. (Not sure of those numbers - but that is the general idea). Benjamin Gatti 17:11, 4 December 2005 (UTC)
thread_title:  Risks, or perceived risks 

message: I notice Ben inserted some comments into the section about how the act works.
The law shields corporate interests from being sued by victims of careless, negligent, or even criminal actions so long as the method of damages include a radioactive component.   
   
The law makes energy more expensive by forcing the market to accept a higher cost product and passing on the additional costs in the form of a mandated transaction. 
I havn't considerd how this should be expanded, but my initial reactions to these additions is that the first is worth including, though in a more neutral way. The second does not seem to me to be supported by anything I have read. I have not seen anything saying anyone is obliged to buy electricity from nuclear generators, but more particularly PA, if it does anything, actually makes the electricity cheaper..it has been accused of being a subsidy not a tax.
:The first is already included in Criticisms.  I agree with you on the second. Simesa 12:50, 3 December 2005 (UTC)
replies: text: P.S. - I again contacted American Nuclear Insurers about how they react in the event of an incident.  We have testimony about how they reacted during Three Mile Island, but without confirmation of today's practices I hesitate to put that into the article. Simesa 12:55, 3 December 2005 (UTC)
thread_title:  how the act works 

message: A subsidy is in effect a forced transaction at a higher total cost than the market (which seeks the lowest cost) would provide. Subsidies are monies in addition to the voluntary price added involuntarily - but paid in any case by the consumer (the taxpayer). The result is to raise the cost of energy (not at the point of purchase - but the bottom line all the same.) As to inclusion of this fact, if the pro side gets to say it enables nuclear energy (which is true)- than the criticism side gets to say that it does so by raising the cost of energy. Benjamin Gatti 15:52, 3 December 2005 (UTC)
replies: text: yes, but PA does not raise the cost of energy. Government provides no funding under this act, nor does it compel anyone to buy anything at a false price. All it does it arrange a mutual underwriting scheme for nuclear companies.  Where is the subsidy?Sandpiper 20:12, 3 December 2005 (UTC)
replies: text: Subsidies by definition raise the cost. If they didn't raise the cost, they wouldn't have any effect. In order to underwrite the risk of an ENO, the US has to levy taxes. Those taxes (even if not spent this year) amount to an additional cost of energy. This subsidy is only part of a panapoly of subsidies for nuclear energy, and when you add them all up - you could for example discount thoses costs from gas taxes and show a reduction in the cost of energy. Moreover, if PAA were not discriminatory, a allowed anyone providing energy to have their risks coolesced more effecienctly and taxpayer backed (rather than going into the market price) then energy would be cheaper. The free market provides the lowest cost - distorting the market alway alway always raises the cost - its just a matter of figuring out where and how. Benjamin Gatti 22:37, 3 December 2005 (UTC)

text: right, then we are back to the question of how likely it is that an accident will happen which will cost more than the industry pool can provide. If this never happens, then the amount of this possible subsidy  is zeo. So whether or not there is a subsidy, and how great, depends on your view of how likely a 'catastrophic' accident will be. Aside from that, exactly how great is the subsidy currently enjoyed by fossil fueled power stations, in that they too are not obliged to pay for the pollution they produce. Then having determined both these numbers, which is greater? Sandpiper 00:23, 4 December 2005 (UTC)
replies: text: Not really; risk is a fungible commidity, and the value of PAA has been determined to be some 3 Billion per year - forcing wind energy operators to pay taxes without the benefits of Price Anderson risk mitigation increases the cost of wind power. The general public gets to pretend that risk doesn't have a cost, just like we get to pretend that social security is going be solvent when we retire (at no additional cost). Risk is something people choose to ignore.
Benjamin Gatti 01:25, 4 December 2005 (UTC)
thread_title: The law makes energy more expensive by forcing the market to accept a higher cost product and passing on the additional costs in the form of a mandated transaction.

message: I made some minor copyedits to Sandpiper's intro to make it a little less jargony/wordy in spots.  Nothing major.  Here's the new version:
::The Price-Anderson Nuclear Industries Indemnity Act (commonly called the Price-Anderson Act) is an act of the Congress of the United States. It provides protection to nuclear plant operators against damages sought as a result of a nuclear accident. Instead of this normal redress, the act establishes a pool of insurance funds from which no-fault compensation may be paid for injuries or damages caused by a nuclear or radiological incident. If an incident exceeds the pool's funds, Congress must consider appropriating more money. The effect of the act is to provide insurance to the nuclear industry that would not otherwise be available in the open market because of the risks inherent in nuclear power. The act currently covers all non-military nuclear facilities constructed in the United States before 2026. Some environmental, consumer and taxpayer watchdog groups, as well as one federal agency, have criticized the act as a government subsidy to the nuclear power industry and argue that it does not protect the public.
· Katefan0(scribble)/my ridiculous poll 04:51, 4 December 2005 (UTC)
thread_title:  Copyedits to intro