German Utilities to Pay EUR23.6 Billion Plus Interest for Nuclear Waste Disposal Under Draft Law--Update
October 14 2016 - 11:21AM
Dow Jones News
By Christian Grimm and Monica Houston-Waesch
FRANKFURT--German atomic power utilities will need to pay the
government 23.6 billion euros ($26.04 billion), plus interest, to
finance the disposal of nuclear waste, according to a draft law
viewed by Dow Jones Newswires.
The money, which can be paid in installments, will be funneled
into a public state fund, releasing power companies from
liabilities concerning nuclear waste.
Germany's four nuclear operators, E.ON SE (EOAN.XE), RWE AG
(RWE.XE), EnBW Energie Baden-Wuerttemberg AG (EBK.XE) and
Vattenfall Group would need to begin making cash payments into the
fund Jan. 1, 2017. All payments must be completed by the end of
2026, according to the draft legislation.
Germany's cabinet is likely to sign off on the bill next
Wednesday, allowing it to get parliamentary approval before the end
of the year.
The draft legislation is closely geared to recommendations made
by a special commission at the end of April. Initially, power
companies had balked at the proposal's 35% risk premium above the
costs calculated for waste disposal and were in talks with the
government over the summer.
In September, E.ON Chief Executive Johannes Teyssen said the
company would probably require capital measures to finance part of
the EUR10 billion the company estimates it would need to contribute
to the fund.
News of the draft law cheered investors who had been wary of the
uncertainty surrounding the companies' nuclear legacies.
At 1430 GMT, RWE shares were trading up 4.9%, while E.ON SE
shares were up 3.7%.
In 2011, after the disaster in Fukushima, Japan, Chancellor
Angela Merkel accelerated the country's nuclear phase out, deciding
to close all atomic power plants in the country by the end of
2022.
Write to Christian Grimm at christian.grimm@wsj.com and Monica
Houston-Waesch at nikki.houston@wsj.com
(END) Dow Jones Newswires
October 14, 2016 11:06 ET (15:06 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.