The UK taxpayers faces a "large and uncertain liability" due to the
government's 2002 bailout of British Energy, the National Audit Office said
today. The government's Department of Trade and Industry took over
responsibility for meeting some of British Energy's nuclear liabilities, re-
estimated last month at almost 5.3 billion pounds (US$9.3 billion). The
department set up a system whereby British Energy contributes about two-thirds
of its cash flow each year to pay off these liabilities, which means more
money for the fund when the company is doing well. If the current high UK
wholesale electricity price persists, said the audit office, the liabilities'
fund will benefit "at a level higher than the most optimistic scenarios
considered by the department" during British Energy's restructuring between
2002 and 2005. However, much depends on the company's future financial
performance, the audit office warned. Such uncertainty "places a significant
risk in the hands of the taxpayer," it said. The report is at
http://www.nao.org.uk .
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