Enacted in 1957 as a short term measure to spur nuclear power plant development, the Price-Anderson Act continues to give nuclear plant operators an unfair subsidy by limiting their liability to the public in the event of a nuclear accident. The act caps liability at $9.4 billion and provides no mechanism for paying damages above that amount. A worst-case accident at a U.S. nuclear plant could result in damages of more than $500 billion, according to a government-commissioned study by the Sandia National Laboratory. However, Price-Anderson's liability limitation would leave victims of a nuclear accident with no guarantee of complete compensation. Moreover, the act fully indemnifies Energy Department contractors, which means that taxpayers would bear the full cost of accidents that take place at contractors' facilities, at third-party facilities where contractors are working, and on the road when contractors are hauling nuclear materials or waste.

By mitigating investment risk and dramatically reducing the cost of liability insurance, the Price-Anderson Act is a major taxpayer subsidy of the nuclear industry, with an annual value estimated at anywhere from $366 million to $3.4 billion. This subsidy distorts power prices and gives the nuclear power industry an artificial advantage over other power sources.

The Price-Anderson Act expired on August 1, 2002, although some provisions remained in force for pre-existing nuclear facilities. On March 7, 2002, during consideration of the Senate energy bill (S. 517), Senator George Voinovich (R-OH) offered an amendment to reauthorize the act. Conservationists opposed reauthorization, on the grounds that it is a subsidy for a new generation of nuclear power plants and an incentive to produce more nuclear waste.

On March 7, 2002, the Senate passed the Voinovich amendment by a 78-21 vote (Senate roll call vote 42). NO is the pro-environment vote. The House likewise reauthorized Price-Anderson in a separate unanimous consent motion, passed in 2001. At press time the House and Senate conference on the energy package had not produced a final bill.