Euro probe into nuke firm 'help'

THE EUROPEAN Commission has announced it is to go ahead with an investigation into allegations that financial help given to British Energy – owner of the Sizewell B nuclear power station – was illegal.

THE EUROPEAN Commission has announced it is to go ahead with an investigation into allegations that financial help given to British Energy – owner of the Sizewell B nuclear power station – was illegal.

The Commission has been examining claims from a variety of anti-nuclear organisations that the bail-out Government loan and council tax deferrals granted to the crisis-hit company were contrary to European law aimed at ensuring fair competition between energy utilities.

There have also been calls for the Commission to examine the restructuring proposals for the company, including a deal in which British Nuclear Fuels, the state-owned nuclear fuel and reprocessing company, has agreed to reduce the prices it charges British Energy.

The Government stepped in earlier this year with a £650 million loan to prevent the nuclear generator slipping into receivership.


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The initial loan has been repaid but a subsequent loan of £250 million is still outstanding.

British Energy was also successful last year in persuading five local authorities to defer until February this year the payment of council taxes totalling £4.3 million in order to solve a cash-flow problem.

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Two other local authorities, including Suffolk Coastal District Council, which had issued a demand for more than £1 million in respect of Sizewell B, declined to grant deferrals.

Friends of the Earth, the Green Party and the Nuclear Free Local Authorities organisation claim that British Energy did not seek permission from the EC before negotiating the deals and that, as a result, they are illegal.

The commission has now announced that it believes there is a valid case to answer and it has started a formal investigation.

In respect of the council tax deferrals it says in a provisional verdict: "In view of the absence of interest charged for the deferral, the Commission doubts whether the deferral can escape being qualified as state aid within the meaning of Article 87 of the EC Treaty."

A spokesman for the Nuclear Free Local Authorities said all state aid not sanctioned by the EC was unlawful.

"Under Article 14 all unlawful aid may be recovered from the recipient," he added.

Charles Barnett, chairman of the Shut Down Sizewell Campaign, said the Government loans and local authority tax deferrals were a "gross disregard "of European regulations and unfair on other electricity producers, including renewable energy generators.

John McNamara, Sizewell B spokesman, said British Energy was aware of the EC decision but could not comment while the investigation was taking place.

A spokesman for the Department of Trade and Industry, said such investigations were "entirely normal" in major restructuring cases.

"This is a significant and necessary step forward in the process for the restructuring of British Energy and the Government looks forward to working with the Commission to complete the case as swiftly as possible," he added.

The EC investigation could take up to 18 months to complete.

david.green@eadt.co.uk

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