GDF Suez threatens court action if Belgium imposes nuclear levy

Belgian utility Electrabel has threatened legal action if the country’s government enacts a bill that would force the its two nuclear operators to pay a € 250 million ($336 million) tax.

The one-time levy would force Electrabel and SPE to contribute to the 2008 financial year. If they do not comply, a penalty of 2% of their annual income could be imposed on them. The bill also reportedly appoints the nation’s energy market regulator to ensure the tax is not passed on to customers.

The nation’s cabinet is set to present the bill to parliament, and a law could be adopted before the end of the year, Belgian newspaper L’Echo reported earlier this month.

Electrabel, which had owned all Belgian reactors, was forced by a 2006 agreement with the government to sell 30% of its overall power generation. The subsidiary of the GDF Suez Group continues to generate 90% of Belgium’s nuclear electricity, however.

SPE, the utility that generates the remaining 10%, is also partly owned by the French group, though Britain’s Centrica will soon acquire this share if cleared by the European Commission. That sale was a condition of the merger that took place between Gaz de France and Suez this July.

Last week in a company statement, GDF Suez said that should the nuclear levy draft be approved by the Belgian parliament, it would submit a claim for annulment with the Constitutional Court.

The “very principle behind such a contribution is contestable,” the group said. The bill “would be discriminatory, since this measure would affect only the two Belgian generators of nuclear energy and this without the difference in treatment being justified by any objective connection between the measure and the considerations of general interest concerning the generation of nuclear energy.”

Besides “the fact that the amount is out of proportion,” the measure conflicts with the “general principle of lawful expectations” of the agreement reached with the government in 2006, GDF Suez also said.

Nuclear power provides more than 54% of Belgium’s electricity. A January 2003 Act prohibits the building of new nuclear power plants and limits the operating lives of existing ones to 40 years. By 2025, all seven nuclear plant licenses will have expired.

Sources: GDF Suez, World Nuclear Association, L’Echo