EON Chief Teyssen Urges Court for 'Fairness' in Nuclear Exit

  • German top court hears suits by EON, RWE and Vattenfall
  • Utilities seek ruling to allow them collect compensation

EON SE Chief Executive Officer Johannes Teyssen pleaded with Germany’s top judges to make sure the country’s three biggest utilities are treated fairly while the nation winds down nuclear-power production.

Teyssen addressed the Federal Constitutional Court in Karlsruhe on Tuesday at the first day of hearings regarding the country’s nuclear exit. While the industry accepts the political decision taken by Germany after the 2011 Fukushima catastrophe in Japan, he said the cost shouldn’t be unilaterally dumped on the utilities.

The case centers on Germany’s nuclear policy, which has flip-flopped amid political changes and industry turmoil. If the utilities win a favorable ruling from the Constitutional Court, EON has said it could seek about 8 billion euros ($8.9 billion) in compensation from the government.

“This isn’t about keeping nuclear power, this is about a fair indemnification," Teyssen, 56, said Tuesday. "The chapter needs to be closed orderly, fair and in line with constitutional rights."

Nuclear Exit

In 2002, the nation’s ruling coalition, composed of Social-Democrats and Greens, decided to exit nuclear power production and reached a deal with the industry allowing them to continue operations for about 32 years.

After the 2009 elections, Chancellor Angela Merkel’s government changed direction. At the end of 2010, the utilities were granted another 12 years of running-time for the reactors. But just three months later, in the wake of the Fukushima disaster, Merkel took a u-turn and repealed the extension.

EON, RWE AG and Vattenfall AB, which are all suing, argue that the government arbitrarily deprived them of their property rights by taking away the extra time. They argue the decision wasn’t motivated by a new analysis, but about how people felt about the risk in the wake of the meltdown at Fukushima following a magnitude 9 earthquake and enormous tsunami in northeastern Japan. The companies argue they had trusted the government and calculated that they could profit from a long-term investment.

Changed Everything

Fukushima changed everything and the lawmakers needed to react, Environment Minister Barbara Hendricks told the judges in the government’s defense. She said politicians need to be able to change laws to implement new risk assessments.

"No other subject has been discussed as fiercely in Germany as this in the last decades," Hendricks said. "Thus, the suing companies couldn’t legitimately trust that the rules would remain under all circumstances."

While the constitutional court will rule on whether fundamental rights were violated, it won’t determine any damages. The utilities would need to start additional proceedings in civil court as a second step.

RWE and Vattenfall utilities haven’t specified what compensation they may seek.

The court will also look into whether Vattenfall is protected under civil rights granted by the German constitution. Vattenfall is owned by the Swedish state. Under German law, constitutional rights protect the public against government action and state entities can’t invoke them.

Energie Baden-Wuerttemberg AG, the fourth German nuclear operator, didn’t join as a party for that reason as it is mostly government-owned. The court still allowed EnBW to comment on the suits.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE