Splitting up companies will not prevent utilities from facing up to the liabilities involved in decommissioning their nuclear power plants, with the German government acting to legally close off that possibility.

Government sources told Reuters that a move will be announced on Wednesday to close a loophole ahead of the annual general meeting of E.ON on June 8, when shareholders will vote on plans to spin off the utility’s power plant and energy trading unit.
Reichstag
Germany‘s No.2 utility RWE also plans to hive off its renewables, grids and retail units into a separate entity and sell a 10 per cent stake in an initial public offering.

The German cabinet approved a draft law last year that ensures power firms will remain liable for the shutdown and decommissioning costs for as long as it takes, even if they spin off subsidiaries that own the nuclear entities.

However, there is some legal uncertainty as to whether this will still apply if the nuclear assets remain with the parent company, as E.ON and RWE now plan to make the case.

As a result, the statement on Wednesday is designed to ensure that the taxpayer will not have to be relied upon for the costs if the parent company goes bankrupt by ensuring that any improved law will still have a retroactive effect.