German power firms shift focus to Berlin as nuclear commission meets

FRANKFURT (Reuters) - German utilities will be anxiously watching Berlin on Friday when a government-appointed commission looks at ways to safeguard the billions of euros they have set aside to pay for the country’s nuclear exit.

Germany’s “big four” utilities - E.ON, RWE, EnBW and Vattenfall - have earmarked nearly 40 billion euros (30 billion pounds) in provisions to pay for the dismantling and waste storage of their nuclear plants, the last of which will be closed in 2022.

But concerns over their financial health have fuelled fears that the power firms may be unable to turn the provisions -- mainly cash, assets and shares -- into liquidity, eventually leaving taxpayers to foot all or part of the bill.

The commission, consisting of 19 politicians, lawyers, academics and businessmen, is scheduled to meet on Friday, Feb. 12, and aims to present recommendations by the end of the month.

Members will meet the bosses of the big four utilities on Thursday, people familiar with the matter told Reuters, hoping to test the water for what will effectively be a funding plan for Germany’s exit from nuclear power, a move decided following Japan’s Fukushima disaster in 2011.

“It’s a make-or-break meeting for the utilities,” said one person familiar with the matter.

One option under discussion is the creation of a fund in which utilities would have to transfer part of their provisions to pay for the final storage of nuclear waste, the most challenging and potentially most expensive part of decommissioning.

Under such a deal, the responsibility for dismantling the plants as well as storing waste until a final storage site has been found would remain with the power firms.

Open questions include the level of provisions and how fast the utilities would have to transfer them into the fund, if such a decision was reached.

“The question of timing is very important as we’re talking about billions of euros that might have to be transferred,” S&P credit analyst Pierre Georges said.

Industry analysts expect a settlement that could include German utilities dropping their various lawsuits against the forced shutdown of nuclear plants in exchange for a favourable solution regarding provisions.

Reporting by Christoph Steitz in Frankfurt, Tom Kaeckenhoff in Duesseldorf and Carolin Copley and Gernot Heller in Berlin, editing by David Evans