Ratings Downgrades

At Utilities, No Credit for Past Glory

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Will dismantling it cost more than building it?
  • Why it matters

    Why it matters

    Energy companies are unhappy with the government commission’s nuclear plant demolition and storage proposal but may have little leverage to make any significant changes.

  • Facts


    • The utilities are worried that the commission proposal will adversely affect their credit ratings.
    • They are expected to contribute €23.3 billion to the fund, or about €6 billion more than the roughly €17 billion they had set aside.
    • The three major rating agencies have already downgraded the credit ratings of the nuclear plant operators.
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The German government’s intentions were undoubtedly good. The nuclear commission it appointed last fall was supposed to reach consensus over how the country should pay for the nuclear phase-out.

And its 19 members did so last week, when they unanimously approved a concept designed to guarantee the demolition of reactors and disposal of fuel rods.

There is only one snag: Those who are supposed to pay for the effort aren’t pleased.

Energy giants E.ON, RWE, EnBW and Vattenfall have rejected the concept. In a joint statement, they said that it would undermine their economic performance.

Specifically, they’re worried the additional costs would weigh on their credit ratings, depriving them of the financial strength they need to restructure as Germany moves from fossil and nuclear to renewable energy sources.

According to industry insiders, RWE, the largest utility serving the German market, is particularly concerned.

“From our perspective, this is too expensive and not financially responsible,” RWE Chief Financial Officer Bernhard Günther said at a press conference in Frankfurt on Monday.

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