E.on to pay 1 billion euros in new german nuclear tax

By Jan Hromadko
Of DOW JONES NEWSWIRES

COLOGNE, Germany (Dow Jones)--E.ON AG (EOAN.XE) Chief Executive Johannes Teyssen expects the tax on nuclear fuel rods the German government is imposing from 2011 to reduce the utility's adjusted after-tax profit by up to EUR1 billion a year in the next six years.

A company spokesman later clarified the tax will dent E.ON's adjusted after-tax profit by around EUR700 million a year after deducting part of the levy against corporate and business taxes. Before deduction, the impact would be around EUR1 billion, the spokesman said.

The nuclear tax, which utilities fought against vigorously, will be in place from 2011 to 2016 and will generate some EUR2.3 billion a year, which the government will put toward a broader effort to cut EUR80 billion from the federal budget.

The tax is part of a broader government energy plan through 2050, under which Germany's nuclear reactors will be allowed to operate longer than under the existing agreement to phase out the last reactor by around 2022.

The government is expected to present the final energy roadmap Sept. 28 after the cabinet has voted on the package.

On the sidelines of an energy conference in Cologne, Teyssen told journalists he expects all of the company's nuclear reactors to remain operable despite the tax.

"Individual reactors will operate on the limits [of profitability], but I expect that all should continue to be operable," Teyssen said.

Hans-Peter Villis, chief executive of E.ON rival EnBW Energie Baden-Wuerttemberg AG (EBK.XE), earlier this month said his company might be forced to shut down its nuclear reactor Neckarwestheim I. The government's nuclear tax and costs for refitting the plant are reducing the profitability of the reactor, Villis said.

RWE AG (RWE.XE), a third operator of nuclear power plants in Germany, has previously said the nuclear tax would hit its recurrent after-tax profit by around EUR500 million a year.

E.ON CEO Teyssen also Wednesday said the company has decided to postpone its next capital markets day to Nov. 10, as it needs more time to evaluate the impact of the government's proposed energy policy.

E.ON had previously planned to host its capital markets day, at which is intends to present a new corporate strategy, on Sept. 28.


-By Jan Hromadko, Dow Jones Newswires; +49 69 29 725 503; jan.hromadko@dowjones.com