Germany willing to limit utilities' nuclear liability

(Reuters) — Germany is willing to shield its utility companies from the risks of rising costs linked to the country's nuclear exit, according to a draft report from a government-appointed committee seen by Reuters on Monday.

The report recommends that Germany's "big four" utilities — E.ON, RWE, EnBW and Vattenfall — transfer the provisions set aside to pay for interim and final storage of nuclear waste in cash to a government — controlled fund by 2022.

In addition, the committee has raised the possibility that the power companies remain liable for up to €36 billion ($39.7 billion) in costs for storage. Up to now the utilities have set aside around 18 billion for this.

Shares in E.ON and RWE both rallied on Monday as the commission's proposals suggested it was willing to set a ceiling on how much they may have to pay to fund the nuclear exit and therefore reduce uncertainty.

E.ON and RWE declined to comment on the draft report. Industry sources said many details remained unclear.

The government is currently examining how it can safeguard the nearly €39 billion in provisions set aside by the utilities to fund the dismantling and storage of waste from their nuclear plants, the last of which will be closed in 2022.

With the utilities battered by a steep fall in wholesale power prices and a massive expansion in renewable energy, concern has grown over their financial health.

The aim of the committee it to work out how to protect the provisions and ensure the taxpayer doesn't end up footing the bill while also keeping the utilities in a viable state. It is due to present its report at the end of this month.

The draft report recommends that the responsibility for dismantling the plants remains with the power firms while the state should take charge of the interim and final storage of nuclear waste by means of a government-controlled fund.

The utilities should keep hold of €17.7 billion in provisions and will also need to set aside a further €1.3 billion, according to the report, which also calls on the power firms to make sure their provisions are more transparent.

The report also recommends that German utilities drop their various lawsuits against the forced shutdown of nuclear plants.