E.ON files for $481m in damages against German government

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Angela Merkel’s German government is facing a $481m compensation claim from E.ON over regulations imposed on the company’s nuclear power plants following the Fukushima disaster three years ago.

However the final figure the government faces in terms of compensation claims from all affected utilities could reach as high as €30bn ($37bn).

Spiegel reports that E.ON took the action at a Hanover court over losses caused by a government-imposed moratorium on nuclear production at the Unterweser and Isar 1 nuclear power plants in the wake of the disaster. It also said it filed a lawsuit against three German states over regulations (a provision in the Atomic Energy Act (AtG)) for the interim storage of nuclear waste at nuclear reactor sites, which is costly.
Nuclear power plant

The Hamburg Tax Court has twice ruled that the continuing tax on nuclear fuel in Germany is unconstitutional, and initial tax refunds totally €170m have already been paid. The German government has continued the collection of this tax and the matter is now with the Federal Constitutional Court and European Court of Justice.

Dr Jonathan Cobb of the World Nuclear Association told Power Engineering International, “Already the Germany courts have judged that government acted unconstitutionally and with substantial procedural error in enacting a law that, through the loss of nuclear fuel tax revenue has removed a source of investment for new renewable capacity and resulted in a continuing role for the dirtiest of fossil fuel generation in place of the shuttered nuclear power plants.”

Utilities were forced to close several reactors immediately after the Fukushima disaster.

Rival RWE (FWB: RWE) already in August said it would seek damages over the ‘illegal’ three-month moratorium which later was turned into a permanent shut-down in a 2011 law.

The moratorium shut down orders pertained to the seven oldest German nuclear power plants Biblis A, Neckarwestheim 1, Biblis B, Brunsbüttel, Isar 1, Unterweser, Philippsburg 1 (and also covered the Krümmel nuclear power plant that was not in operation at the time). They had to stop operations immediately and never re-commenced as policy on nuclear in Germany changed.

The plants were initially regarded as “bridging technology” on the way to a (mainly) renewable energy supply.

However in 2011, the government changed to the Energiewende policy, proposing comprehensive legislative changes, including a nuclear phase-out until 2022 and the definitive shut down of the above-mentioned nuclear power plants covered by the moratorium.

With regard to the preliminary shut down orders E.ON had unsuccessfully tried to reach an out-of-court settlement with the German Federation and the German states Bavaria and Lower-Saxony, according to an E.ON spokesperson.

RWE has filed a lawsuit against the government regarding closure of its Biblis-B and said that the phase-out cost the company over EUR 1 billion in 2011 alone. E.ON is also seeking EUR 8 billion in compensation.

Vattenfall in June 2012 contested the confiscation of generation rights for the Brunsbuttel and Krummel nuclear power plants, and filed the case with the autonomous International Centre for Settlement of Investment Disputes (ICSID). It had previously said simply that it expects full compensation for its costs, which it noted as SEK10 billion ($1.5bn) for the first half of 2011 alone. In mid 2013 it announced a SEK 10.2 billion (€1.2bn) write-off on those two plants.

Meanwhile EnBW supports the legal actions brought by the other utilities, saying that the government’s actions infringe its property rights, but being almost completely publicly-owned it is unable to file a legal complaint. However, by May 2014 it had paid €790m in the tax, so would welcome a refund. The four utilities have made provisions of over €30bn ($37bn) on account of the government decisions, and the German government appears to be facing claims of this magnitude.

 



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