Electrabel appeals to win back nuclear interest

Summary

Electricity producer Electrabel is appealing a ruling that rejected the company’s request for reimbursement of the “nuclear interest” charged by the federal government, totalling €250 million a year

Energy producer claims double taxation

Electricity producer Electrabel will appeal a court ruling that rejected the company’s request for reimbursement of the “nuclear interest” charged by the federal government between 2008 and 2011, totalling €250 million a year.

Electrabel claimed the charge on profits from energy produced by nuclear power plants was a case of double taxation, and breached the government’s promise of a stable fiscal regime.

The nuclear interest was a type of compensatory mechanism imposed by the government of Yves Leterme in 2008 when it appeared that the lower electricity prices brought about by the writing off of the costs of the nuclear power stations were not being passed along to consumers. Originally, it had been planned for the plants to be amortised over a relatively short period of 20 years from coming into service between 1975 and 1983.

After 2003, suppliers like Electrabel, a subsidiary of the French-owned GDF Suez, and to a lesser extent EDF and E.On, were making more profit. Leterme’s government then imposed the €250 million extra charge.

The feeling was strong that foreign companies – Electrabel and EDF are both French-owned, while E.On is German – were profiteering at a cost to Belgian consumers and Belgian industry, which pays more pro rata for its power supply than companies in neighbouring countries, among them France and Germany.

In total, Electrabel is claiming about €1 billion, once interest is taken into account.

The tribunal of first instance rejected the claim, based on a ruling from the Constitutional Court from 2010 that the nuclear interest was a legal charge.

photo: courtesy Michielverbeek/Wikimedia