German parties want utilities to shoulder nuclear shutdown costs

Reuters News
Posted: Nov 14, 2013 5:54 AM

By Markus Wacket

BERLIN (Reuters) - German parties negotiating the formation of a coalition government want to make utilities pay more to dismantle their nuclear power plants and protect taxpayers from billions of euros in related costs, documents obtained by Reuters show.

Such a move, if adopted by a coalition of Chancellor Angela Merkel's conservatives and the Social Democrats (SPD), would be a blow to E.ON, RWE, Vattenfall and EnBW who have already put aside 30 billion euros in provisions.

"A ... fund could be considered to safeguard the financing of the disposal of nuclear assets," the paper from the working group on environmental policies said.

Under the new proposal, the utility companies could be forced to pay into the fund which would be under political control.

Over a dozen working groups are hammering out policy compromises on a range of issues with the aim of forming a government in December. The nuclear proposal would have to be approved by a larger coalition panel led by Merkel and other party leaders before it was set in stone.

"We expect cooperation from the nuclear power operators in the switch to renewable energy and an acknowledgement of their responsibility for the orderly ending of the use of atomic energy," the paper said.

The idea of a fund reflects concerns that Germany's four nuclear power companies have taken insufficient precautions to pay for the dismantling of the plants and storage of atomic waste.

Currently, German taxpayers would be liable if one of the companies, which have become heavily indebted partly because of Germany's drive towards renewable energy, filed for bankruptcy.

But by transferring some or all of the provisions to a fund, the utility companies might have to forego the interest they currently earn on the sum which appears on the balance sheet but is mostly put back into the company.

Even the prospect of a fund could affect rating agencies' views of the utilities, industry sources said.

Merkel's abrupt decision after Japan's 2011 Fukushima nuclear disaster to speed up the phaseout of nuclear power in Europe's biggest economy and switch to renewables has put utilities under pressure. New supplies of generously subsidized renewables have helped to sharply push down wholesale prices for power, which the utilities sell to end users.

The SPD is also keen to raise nuclear fuel tax and to extend the levy beyond 2016, when it is currently due to expire. However conservatives oppose this notion.

(Writing by Madeline Chambers; Editing by Susan Fenton)