Oct. 8 (Bloomberg) -- Exelon Corp., the biggest U.S. nuclear operator, can’t use as much as $1.69 billion of claimed liabilities associated with decommissioning three nuclear power plants to generate tax benefits, a federal court ruled.
The U.S. Court of Federal Claims in Washington today barred the power generator from factoring decommissioning costs into the tax basis of plants it bought in 1999 and 2000 because they’re still operating.
All the decommissioning activities cited in Exelon’s complaint are described as occuring when an operator closes a plant, and “it is undisputed that none of the three nuclear power plants at issue in this suit were closed, or were about to be closed in 1999 or 2000,” Judge Lynn Bush said in her ruling dismissing most of a suit filed by the company in 2009.
Exelon claimed about $190 million in tax benefits, including increases in deductions and decreases in capital gains, from 2001 to 2003, according to figures from Exelon’s complaint cited by Bush in her ruling.
Tax benefits would extend for “many tax years” and total “hundreds of millions of dollars in additional deductions” if the suit succeeded, Bush wrote.
The case was listed as a variable that could influence whether Exelon’s unrecognized tax benefits “significantly increase or decrease within 12 months,” according to the company’s 2012 annual report, dated Feb. 22.
The suit was filed by Exelon unit AmerGen Energy Co. LLC, which had acquired the three plants, after the Internal Revenue Service disallowed the tax treatment sought by the company.
The facilities are Three Mile Island Unit 1 Nuclear Generating Station in Middletown, Pennsylvania, Clinton Power Station in Clinton, Illinois, and Oyster Creek Nuclear Generating Station in Forked River, New Jersey.
“There is no associated liability or impact to Exelon’s earnings resulting from the federal claims court’s decision,” Paul Elsberg, a spokesman for Chicago-based Exelon, said in a statement. “We will be evaluating the court’s decision to determine whether or not to pursue an appeal.”
The case is Amergen Energy Co. LLC v. U.S., 09-cv-108, U.S. Court of Federal Claims, District of Columbia (Washington).
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