EON, RWE Retreat After German Court Backs Nuclear Fuel Tax
EON dropped 1.3 percent to 16.45 euros after a tax court in the state of Baden-Wuerttemberg upheld the levy in two interim rulings against plaintiff EnBW Energie Baden- Wuerttemberg AG, the country’s third-largest utility. RWE slipped 0.7 percent while EnBW slid 2.6 percent.
“There are no serious doubts as to the constitutionality of the nuclear fuel tax,” the finance court of Baden- Wuerttemberg, EnBW’s home state, said today in an e-mailed statement. The rulings, which can be appealed, applies to EnBW only.
Germany’s utilities are cutting costs and selling assets to curb losses related to the government’s decision to exit nuclear power by 2022. The shutdown of the country’s eight oldest reactors, as well as the nuclear fuel tax, drafted in 2010, cut EON’s earnings by 2.3 billion euros ($3 billion) in 2011, Chief Financial Officer Marcus Schenck said in November.
The judges didn’t share the legal analysis by courts in Munich and Hamburg, which had ruled in favor of EON and RWE over the tax. The divergence in rulings will be resolved once Germany’s top tax court mades its judgement. Appeals of the Munich and the Hamburg cases are pending, the judges said in today’s statement.
EnBW is “reading and analyzing” today’s rulings, Ulrich Schroeder, a company spokesman, said by phone.
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