Tuesday, February 26, 2008

US House Set To Vote Next Week On Energy Tax Package

US House Set To Vote Next Week On Energy Tax Package
Dow Jones & Company, Inc. - Feb 22

Congressional Democrats will try again next week to take away taxbreaks for oil companies in order to finance renewable-energy and buildingefficiency projects, but success remains elusive amid a shortage of votes inthe Senate.

The U.S. House of Representatives is tentatively set to vote onWednesday on the bill, which would repeal more than $17.6 billion in taxbreaks for oil and gas producers over 10 years. Consumers would gain new taxbreaks for buying plug-in hybrid cars. Companies would be able to continuetaking tax credits for wind, solar and other renewable-energy projects,extending breaks that expire at the end of 2008.

The House already cleared similar legislation last year, and passagenext week is almost assured. But in the Senate, Democrats have struggled toget around opposition from Texas Republicans and foes such as Sen. PeteDomenici, R-N.M. The Republicans side with oil companies in arguing that theway to address rising oil prices is through encouraging production throughtax incentives and favorable accounting treatment.

The resulting impasse has an effect on wind-project developers, whosefinancing depends on whether they can count on tax credits - which may onlybe taken once a project gets up and running. With uncertainty about whetherthe tax credits will be extended, "it just brings everything to a halt,"said Michael Eckhart, president of The American Council on Renewable Energy.

"It's not because it changes the economics. It's that it completelymakes it impossible to know how to finance the project not knowing what thevariables are."

Winners and Losers
New York, home of House Ways and Means Committee Chairman CharlieRangel, D- N.Y., would be a big winner in the bill. Under the bill, Congresswould provide tax credits for transportation projects connecting with theNew York Liberty Zone, the area of Lower Manhattan that was damaged in theSept. 11, 2001, terrorist attacks.

Oil and gas companies would lose some $13.6 billion in tax breaksgranted in 2004 for domestically produced goods. Exxon Mobil (XOM), ChevronCorp. (CVX), ConocoPhillips (COP), Royal Dutch Shell (RDSA), and BP Plc (BP)would lose the tax breaks entirely. The deduction would be frozen at 6% forsmaller oil and gas companies. That deduction had been scheduled to jump to9% in 2010, as part of a 2004 law that gradually phased in the manufacturingtax break.

Oil companies would also lose another $4.1 billion under provisionsthat provide less favorable tax treatment for certain kinds of foreignincome.

Under the bill, Congress would extend for three years, through the endof 2001, tax credits for wind, hydropower, and other facilities thatgenerate power from so-called renewable sources. The tax credit would becapped at 35% of the present value of a facility's cost, and is estimated tosubtract $6.57 billion from federal coffers.

Under the bill, Congress would extend for eight years, through the endof 2016, tax credits for commercial investments in solar-energy equipment.Companies are able to receive a credit of 30% of the cost of solar-energyprojects, with no limit, but those credits will expire at year's end unlessCongress acts. The proposal is estimated to cost $621 million.

Congress would extend until the end of 2014 the tax credit forhomeowners who buy solar panels or solar hot water heaters. The tax creditwould also be more generous, doubling to $4,000 from $2,000. The bill is H.R. 5351.

-By Siobhan Hughes, Dow Jones Newswires; 202-862-6654;Siobhan.Hughes@dowjones.com

Maryland's Debate of Stranded Costs Heats Up -- AgainNGI's Power Market Today - 2/22/08
The Maryland Public Service Commission (PSC) has ordered Baltimore Gas& Electric Co. (BGE) and its parent, Constellation Energy Group Inc., toappear at a hearing Tuesday (Feb. 26) in Baltimore to answer questions aboutstranded costs, nuclear decommissioning liability and the growing war ofwords between the companies and state regulators.

In late January the PSC called BGE and Constellation Energy officialson the carpet for faulting a PSC report on stranded costs and threateninglitigation (see Power Market Today, Feb. 1). In an earnings press releaseand during a conference call with financial analysts, Constellation had saidit was terminating a November 2006 litigation standstill agreementpertaining to $386 million that the company believed was unconstitutionallytaken in Maryland Senate Bill 1, which was passed in June 2006 during aspecial session of the Maryland General Assembly (see Power Market Today,Jan 31; Jan. 22; Feb 1, 2007).

"The recent [PSC] interim report on stranded costs and on BGE's 1999settlement injected a destabilizing element of uncertainty into theregulatory climate and energy marketplace in Maryland," said ConstellationCEO Mayo A. Shattuck III. "We cannot abide by efforts to use hindsight toreverse decisions and agreements that were made nearly a decade ago bymultiple parties in full accordance with the law."

Those remarks were followed by a PSC order that summoned BGE andConstellation executives to meet with commissioners following their regularweekly meeting on Feb. 6. The two companies submitted written responses toPSC questions on nuclear decommissioning liability and Senate Bill 1 on Feb.19 and are due to submit further written responses by Monday (Feb. 25).

In a report to the state legislature last month, the PSC said theactual costs to ratepayers of a 1999 deregulation bargain struck with BGEwere vastly underestimated. The PSC said it was opening investigations intohow the settlement was being carried out and asked the legislature foradditional authority to change some of the terms of the settlement and/ororder relief for ratepayers. A review of the settlement and how it hasplayed out, conducted by an outside law firm under the regulators'direction, had led the PSC to conclude that "the 1999 order approving thesettlement does not reflect the actual costs of the settlement toratepayers, nor the huge imbalance of costs and benefits."

The commission criticized the way the various costs were stated, whichit said contributed to a poor evaluation of the deal. "Had the full extentof costs and benefits been known and properly weighed we do not believe thatthe settlement would have been found to be in the public interest." It alsofound fault with allowing the sale of nuclear plants to a BGE affiliatewhile ratepayers retained the liability for decommissioning the plants witha decommissioning fund that was and is "seriously underfunded."

Constellation Energy immediately disputed major conclusions of thereport, saying it was "an attempt to rewrite the true history of what was acomplex, multi-stakeholder process." The commission and its staff, theOffice of People's Counsel and the Maryland Energy Administration were amongthose signing the agreement. Constellation defended the 1999 settlementsaying "it wrongly assumes that those stakeholders involved in the 1999deregulation legislation and subsequent settlement process did not know whatthey were doing."

The legislature should not consider attempting to undo cases thatalready have made their way through the Maryland courts, Constellation said.The stranded cost issue held up through two court reviews.

Ratepayers benefited from a six-year rate freeze worth about $1billion, Constellation said, and pointed to PSC staff expert testimony tothe effect that residential customer bills were no higher than they wouldhave been had there been no stranded costs.

A political shockwave hit the state in 2006 when after 13 years ofcapped or declining rates, the caps agreed to in the settlement were slatedto come off and it was disclosed that a typical bill for a residentialcustomer would have increased by a massive 72%, or $743 annually. The statelegislature acted to keep a modified cap in place through mid-2007, and BGEoffered customers a transition plan to market-based rates, which ended Dec.31, 2007 (see Power Market Today, May 29, 2007).

The chairman of the PSC and the head of the Office of Peoples Counselboth resigned early last year as a result of the public uproar over the ratechange. Their resignations came after the Maryland legislature triedunsuccessfully to fire the five members of the PSC (see Power Market Today,Jan. 30, 2007). Copyright 2008 IPress, Inc. All rights reserved.

US Governors: Coal Must Be Part Of Green Energy DebateDow Jones & Company, Inc. - Feb 23

U.S. governors pushing alternative energy development aren't shyingfrom coal, a major culprit in global warming but also a homegrown energysource and an economic lifeline for many states.

Leaders of coal-rich states say clean-coal technology is a must.Governors from states without coal want more evidence the technology works.

"There's no doubt there's a tension and there's no doubt there is veryrapidly growing public opposition to coal," said Gov. Jim Doyle, D-Wis. Hisstate relies heavily on coal for power although Wisconsin isn't a coalproducer.

Energy tops the agenda at the governors' annual winter meeting. Thegroup's new clean energy initiative seeks to promote renewable fuels such asethanol and biodiesel and reducing greenhouse gas emissions.

"Next-generation coal is going to need to continue to be part of ourenergy future for this country," said GOP Gov. Tim Pawlenty of Minnesota,chairman of the National Governors Association.

"It is abundant, it is available, it is Americanized in the sense thatwe control the supply," he said Saturday. "We would be incomplete and doinga disservice to the debate and the ultimate policy direction that we'regoing to take if we don't envision coal being part of that."

Next-generation coal typically refers to capturing and somehowsequestering or storing the carbon that coal produces. It also envisionsreducing or eliminating emissions as coal is burned.
Pawlenty has embraced renewable fuels such as corn-based ethanol andconservation, but he also promotes clean-coal technology.

Such technology is a rallying cry for many coal-producing states. Theysay it is possible to continue relying on the fossil fuel while minimizingits impact on the environment.
Gov. Ed Rendell, D-Pa., envisions an economic turnaround if clean-coaltechnology takes off.
"Coal states would be back in business big time and the economieswould flourish," said Rendell, the association's vice chairman.

Presidents of two of the country's biggest power companies urgedgovernors not to dismiss coal, calling it the country's most abundant energyresource.
"We cannot ignore coal, we cannot demonize coal," said Thomas Farrell,chairman of Richmond, Va.-based Dominion Resources Inc. (D).

Michael Morris, chairman of Columbus, Ohio-based American ElectricPower Co. (AEP), said "the whole notion of delegitimizing coal is somethingwe should all be frightened of."
Gov. John Baldacci, D-Maine, needs to hear more before he wouldinclude clean- coal technology among the promising energy ideas for thecountry. His state promotes renewable energy produced through wind, solarand even tides.

"You have to deal with the coal states, but I don't think you wantthem doing more of what they're doing until they change what they're doingand make it truly the next generation," he said in an interview.

"Not just say clean-coal technology, but really do clean-coaltechnology."

Proponents say all energy sources have their problems. The key, saysGov. Brian Schweitzer, D-Mont., is a national energy policy with manyoptions and sources.

That is important because electricity demand will increase in thefuture. For instance, Schweitzer predicted that 10 years from now asignificant number of cars will be plug-in hybrid vehicles, which willrequire more power plants, not fewer.

Coal "has a CO2 problem, wind has a reliability problem, solar has aprice problem, nukes have a price and radiation problem," Schweitzer said."So all of those technologies have opportunities. but they all have problems- coal's no different."

He added, "What I can say about coal, is we have it. We have it in agreater supply than anyplace else on the planet."

Doyle, the Wisconsin governor, said the emerging consensus is a mix ofapproaches. He said the state's reliance on coal for electricity willdecline but definitely not disappear.

NRC Will Release Vermont Yankee Nuclear Safety Evaluation MondayVERNON, Vt. - Dow Jones & Company, Inc. - Feb 22

Federal regulators are getting ready to issue their safety evaluationof Vermont Yankee's plan to stay open an extra 20 years.

Staff at the U.S. Nuclear Regulatory Commission are expected torelease the evaluation Monday, a key milestone in the 35-year-old nuclearpower plant's bid to operate past its scheduled 2012 closure.

Neil Sheehan, a spokesman for the NRC, says the draft date for theevaluation is Monday, but that an NRC subcommittee, could take until March6th to sign off on the evaluation.
Vermont Yankee is operated by Entery Corp. (ETR).

Yergin: Climate Change and Energy are Converging into New Era of CleanEnergyCAMBRIDGE, Mass., Feb 23, 2008 -- BUSINESS WIRE
"High energy prices, climate change and energy security are convergingas the new engine driving the development of clean energy," Daniel Yergin,chairman of Cambridge Energy Research Associates (CERA) and executive vicepresident, IHS Inc., said today in Washington, D.C. "There is a major shiftin public opinion towards clean energy, which is being bolstered by thegrowing conviction that new carbon policies will reshape the competitivelandscape of the global energy business."

Yergin spoke at the 2008 National Governors Association (NGA) WinterMeeting. The organization's members are the governors of the 50 states,three territories and two commonwealths of the United States. Making thenation a global leader in clean energy was the key topic of this year'smeeting.

Citing CERA's new study, Crossing the Divide: the Future of CleanEnergy, Yergin said that renewable power and biofuels could be supplying asmuch as 16 percent of the global electric and transportation needs by 2030."We are going through a period of what I call the 'great bubbling,' a highdegree of innovation all across the energy spectrum," he said. "Toparaphrase a famous phrase about states as the laboratories of democracy,the states today are truly 'laboratories' of energy innovation andinitiative for the nation.

"There are a broad range of opportunities and benefits, as well asrisks, and pitfalls, as the modern energy industry increasingly moves toadopt clean technologies that will be part of the alternative, low-carbonpathway to the energy future," Yergin told the NGA audience. "Allparticipants in the global energy business, from traditional firms such aselectric power companies and oil and gas companies to new entrants such asventure capital firms and high tech companies will play a role in shapingthis changing energy future. So will government at both the state andfederal levels."

On current oil prices, he added, "A major reason for the current leapto around $100 a barrel is the economy - but now a weak U.S. economy, ratherthan the strong global economy that has been so important the last fewyears. A slowing U.S. economy, rate cuts by the Federal Reserve andexpectations of more, and a weak U.S. dollar - along with the reappearanceof inflation around the world - are driving investors into oil and othercommodities. Instead of the traditional 'flight to the dollar' during timesof uncertainty, we are seeing a 'flight to oil.'"

He cited several key insights from the Crossing the Divide study:
-- Renewable power technologies are poised for substantial growth -Wind will make the largest gains, followed by solar power and biomass --despite near-term bottlenecks in wind turbine manufacturing, supplyshortages in silicon and competitive pressures from escalating componentcosts.

-- Government policy remains a key driver for clean energy advancement- Putting a price on CO2 emissions, setting mandates and providing subsidiesall work to kick-start clean energy technologies by meeting the economiccompetitiveness and cost advantages of conventional technologies. Thechallenge in the years ahead is to provide subsidies in a way that ensuresthat these technologies get off the drawing board and are able to weanthemselves from support - allowing for a phase-out rather than an increasein subsidies - as they become commercially viable on their own. It is alsoimportant that mandates be set at achievable levels and with care so as notto create unexpected pressures from higher prices.

-- Clean energy portfolio - A full range of clean energy technologiesalong with demand side responses will be needed to address the challenge ofredirecting global greenhouse gas emissions trends. While many clean energytechnologies are commercially available, more work is needed to develop anddemonstrate a broader set of technologies including advanced coal systems.

-- Conventional emission-free technologies - Nuclear and hydroelectricgeneration will account for most of the clean energy impact for the nextdecade, and almost half the gross clean power additions by 2030. The coalresource base and utilization in the United States and China will create apowerful drive to develop "clean coal" technologies.

-- Asia demand and manufacturing - Rapid economic growth may pushAsian energy needs from 30 percent of current global demand to 40 percent by2030; combined with its manufacturing cost-competitiveness, this could makeAsia a nexus for clean energy technology research, development and equipmentproduction.

-- The Economy - Economic growth affects energy demand and carbonemissions as well as the political and financial support for research anddevelopment of new clean energy technologies.
-- The Big Three: "The Big Three" in terms of energy consumption - theUnited States, the European Union and China - will have a major impact ondevelopment of "clean energy," along with certain other countries,particularly Japan, India and Brazil.

Yergin explained how CERA's analysis in Crossing the Divide uses ascenarios framework to assess the prospects among the various clean energytechnologies and help define key risks and opportunities as companies seekto place their technology bets. The analysis addresses new and conventionalenergy technologies that can provide energy with a minimal carbon footprintand facilitate greater energy security. These technologies include biofuels,renewable power technologies, carbon capture and storage, nuclear andhydropower.

About CERA
Cambridge Energy Research Associates (CERA), an IHS company (NYSE:IHS), is a leading advisor to energy companies, consumers, financialinstitutions, technology providers, and governments. CERA (www.cera.com)delivers strategic knowledge and independent analysis on energy markets,geopolitics, industry trends, and strategy. CERA is based in Cambridge,Massachusetts, and has offices in Bangkok, Beijing, Calgary, Dubai,Johannesburg, Mexico City, Moscow, Mumbai, Oslo, Paris, Rio de Janeiro, SanFrancisco, Tokyo, and Washington, DC.

For information about Crossing the Divide, contact Michael Banville atmbanville@cera.com.
(C) 2008, Cambridge Energy Research Associates, Inc. All rightsreserved. CERA and the CERA logo are registered trademarks of CambridgeEnergy Research Associates, Inc.
SOURCE: Cambridge Energy Research Associates

Brazil not to yield gas to Argentina, offers nuclear energy agreementFeb 23, 2008 -- BBC Monitoring
Luiz Inacio Lula da Silva withstood the charm of the president ofArgentina, Cristina Kirchner. He does not want to give up one bit of thenatural gas that Brazil receives from Bolivia to be sent to the Argentines.In a conversation called "friendly and frank" by Brazilian Foreign MinisterCelso Amorim, the presidents each expressed their needs. Today thediscussion continues with the presence of the Bolivian president, EvoMorales. Lula proposed that technical people from the sector also attend thebreakfast. Brazil will likely offer the Argentines different types ofenergy, but not gas.

The president of Petrobras [Brazilian Petroleum Corporation], SergioGabrielli, did not take part in the private conversation between Lula andCristina. Even so, he gave the tone of the dialogue between Brazil andArgentina, after the ceremony in the Casa Rosada [presidential offices]where a broad agreement for cooperation in various areas was signed.Gabrielli said that Brazil needs "every molecule" of the 30m cubic meters ofgas that it imports daily from Bolivia.

"That does not mean that Petrobras is not sensitive to the needs ofArgentina's electricity market. The company is ready to analyse somepossibilities for electricity supply in times of emergency, makingadditional electrical generation possible for export," Gabrielli said. Herevealed that teams from the two countries are conducting studies to findother sources of energy that can be supplied to Argentina to take care ofthe demand for energy that the country needs. On the list of options arethermal electric power plants run on fuel oil or natural gas, and it ispossible to regulate the supply to permit accumulation of water in thereservoirs of the Argentine hydroelectric power plants. It is cheaper forthe neighbour country, however, to buy natural gas to feed its thermalplants than to buy the Brazilian electric power. To offset that, Gabrielliaccepts correcting the possible difference in prices.

During an impromptu speech in the Argentine Congress, Lula said thatthe energy problems are structural and common to all of South America. "Weall have problems," he stated. He said the same to the president ofArgentina. He stated that, due to the lack of investments, the region isfacing serious difficulties. The president of Petrobras, meanwhile,explained that the results of the company's billion-dollar investments, bothin Bolivia and in Argentina, will come starting in 2010.

In the dispute over the Bolivian gas, the possibility of retaliationis hovering in the air, with withdrawal of the gas consumed by PetrobrasEnergia, whose headquarters is in Buenos Aires. Gabrielli denied pressurefrom the Argentine government for the state-owned company to give up part ofthe share of gas that it buys from Bolivia. "We have a good relationshipwith Argentina. It is a relationship typical of all the oil energy companieswith the governments of their countries. It is a love-hate relationship," hestated.

Plan To Have Nuclear Reactor

Brazil and Argentina want to develop a nuclear power reactor togetherand build a binational company for enrichment of uranium. The negotiationsto set up the company will start in June. The agreement is one of the 17items in the superpackage of commitments in the areas of politics,economics, production, science and technology, and energy signed yesterdayby presidents Luiz Inacio Lula da Silva and Cristina Kirchner.

"We are going to launch a joint satellite and develop a programme ofpeaceful cooperation in nuclear matters which will be a model for a worldinflamed by the arms race temptation and by ideological politicalintolerance," Lula told the Argentine deputies and senators yesterdayafternoon. In an attempt to facilitate the two countries' understanding inregard to energy sources, the agreement suggests that increasing theexportation of Brazilian electric power to Argentina move forward.

Lula and Cristina also asked to speed up the Garabi hydroelectricprojects. They were not satisfied with the schedule, which stipulatescompletion of the environmental impact studies only in March 2011. TheMinister of Foreign Relations, Celso Amorim, will be in charge of drivingthe technical areas to move up the schedule.

Also provided, according to the joint declaration of the twopresidents, is the creation of a binational biopharmaceutical and technologycompany, in order "to guarantee the supply of essential medications to thepublic health systems of Argentina and Brazil and the conditions of thepublic's access to these medicines," according to the document.

Brazil also promised to manufacture parts of Embraer's [BrazilianAeronautics Company] 170 and 190 family of airplanes. The aeronauticalcooperation agreement signed by the ministries of Defence, Embraer, andCordoba Materiel Area - AMC (the old Military Airplane Factory) - alsoprovides for the purchase of Brazilian aircraft and the development ofaeronautical projects of mutual interest. Also planned is theindustrial-scale production and marketing of the Gaucho, a military jeepdeveloped jointly by the Brazilian and Argentine armies.

Source: Correio Braziliense website, Brasilia, in Portuguese 23 Feb 08
BBC Mon LA1 LatPol tj

EGCO urges Thai Govt to consider coal-fired and nuclear powerBANGKOK, Feb 22, 2008 -- AsiaPulse

Concerned with high and rising production costs for electricity andthe dwindling supplies of local natural gas used to produce power,Thailand's Egco Group is urging the new government to build coal- andnuclear-powered electricity plants to meet national needs.

Visit Akaravinak, president of Egco Group, Thailand's firstindependent power producer, said the kingdom currently uses locally-suppliednatural gas for 70 per cent of its gas-powered electricity production, butlocal supplies are shrinking and becoming more expensive. He said Thailand'senergy minister should act, and build coal and nuclear-powered electricityplants despite protests from the public as such sources could bring down thelocal production costs as well as the prices paid by consumers.

The previous government planned to construct a 4,000-megawatt (MW)nuclear-power electricity plant and conducted a feasibility study, Mr Visitsaid. The government should implement the project under study, he said,noting that the Egco Group plans to provide knowledge about nuclear-poweredelectricity plants to its staff.

Currently, the Egco Group is jointly investing with the state-ownedElectricity Generating Authority of Thailand (EGAT) and two other Thai firmsin building 3,600 MW coal-powered electricity plant on Koh Kong in Cambodia.Costs are high because a 400-kilometre transmission line must be installed,he said. Construction will have to take place in Cambodia, Mr Visit said,because of protests over building any kind of electrical power plants inThailand.

Meanwhile, Energy Minister Poonpirom Liptapanlop said her ministrywould continue its feasibility study on a nuclear-powered electricity plant.Budget allocation on the study is set at Bt1.3 billion (US$41.19 million)and must be completed within three years, said Mrs Poonpirom.

If a nuclear-powered electricity plant is built within the next 13years, both pros and cons in regard to the population as well as theeconomy, and acceptance by the public must first be taken intoconsideration. (TNA-OANA)

Power unit at Russian nuclear plant back on line after shutdownVoronezh, Feb 22, 2008 -- BBC Monitoring
The fourth power generating unit of the Novovoronezh nuclear powerplant was reconnected to the power grid today after repairs, the plant'scontrol room has told ITAR-TASS.
Power generating unit No 4 was shut down on 19 February following abreakdown of an electric drive of the reactor protection control system. Thepower plant's specialists performed all necessary repairs to fix thebreakdown.

The fourth power unit of the Novovoronezh plant with VVER-440 reactorwith the capacity of 417,000 kW came on stream in 1972. Its 30-year designservice life was extended by 15 years after it had expired in 2002.

All three generating units of the Novovoronezh nuclear power plantwith a total capacity of 1,834 MW are operational now. The radiation levelat the power plant and the adjacent territory is normal.

Source: ITAR-TASS news agency, Moscow, in Russian 0803 gmt 22 Feb 08
BBC Mon FS1 MCU 220208 yk/ab

UK Government: Clean up fund is precondition for new nuclear - HuttonFeb 22, 2008 -- M2 PRESSWIRE
New nuclear power station operators will be required by law to setaside money from day one of generating electricity for their eventualdecommissioning and waste costs, Business Secretary John Hutton made cleartoday.

Draft guidance published today sets out how clauses in the Energy Billrequiring operators of new nuclear power stations to meet the full cost ofdecommissioning and their full share of waste management costs would work.

Companies would be required to:
* Demonstrate detailed and costed plans for decommissioning, wastemanagement and disposal, before they even begin construction of a nuclearpower station;
* Set money aside into a secure and independent fund from day one ofgenerating electricity; and
* Have additional security in place to supplement the Fund should itbe insufficient, for example, if the power station closes early.
In ensuring these safeguards, the Secretary of State will draw onexpert advice from the soon to be established Nuclear Liabilities FinancingAssurance Board.

Mr Hutton said:
"Last month I invited energy companies to bring forward proposals fornew nuclear power stations and we are already taking steps to facilitatethis. It is in the national interest that the energy industry is able toinvest in secure low carbon energy sources.

"But it is also in the national interest that we take every step toensure that the taxpayer is protected from the clean up costs down the line.The Energy Bill and the guidance published today make clear that companiesare liable by law to meet their full costs.

"Let me be clear - full means full. Funds will be sufficient, secureand independent, it will be a criminal offence not to comply with theapproved arrangements and we are taking powers to guard against unforeseenshortfalls."

The draft guidance, published for consultation, will assist businessesin understanding their obligations under the Energy Bill, and what isrequired for a Funded Decommissioning Programme to gain approval.

Included is an indicative timeline by which the Government expects topublish its updated estimates of the costs of decommissioning and managingand disposing of the waste from new nuclear power stations, and therefore bein a position to set a fixed unit price for disposal of intermediate levelwaste and spent fuel. This fixed unit price will be set at a level over andabove expected costs and will include a significant risk premium, to providethe taxpayer with material protection.

We consider that a decision by an operator to proceed in principlewith building a new nuclear power station and therefore to request from theGovernment a fixed unit price for waste disposal in a Geological DisposalFacility could come as early as mid 2009.

1. This consultation on the draft guidance will end on the 16 May 2008and follows the publication of the White Paper on Nuclear Power on 10January 2008. The White Paper announced the Government's formal response tothe consultation on the future of nuclear power, that it would be in thepublic interest to allow energy companies the option of investing in newnuclear power stations.

2. Under the Energy Bill, operators of new nuclear power stations mustproduce a Funded Decommissioning Programme for approval, which consists oftwo parts: a Decommissioning and Waste Management Plan and a FundingArrangements Plan.

3. "Full decommissioning costs" are the costs for: dismantling theplant at the end of its operational life; and, returning the site to acondition agreed with the regulators (likely to be a state suitable forrestricted use, industrial or recreational).

4. The "full share of waste costs" means: The costs that are directlyattributable to disposing of new build waste in a geological disposalfacility; and, a contribution towards the fixed costs of building ageological disposal facility.

5. The first set of draft guidance (Part 1 - Decommissioning and WasteManagement Plan Guidance) will assist businesses in setting out and costingthe steps involved in decommissioning a new nuclear power station andmanaging and disposing of radioactive waste and spent fuel in a way whichMinisters may approve.

6. The second set of draft guidance (Part 2 - Funding Arrangement PlanGuidance) will assist operators in setting out acceptable proposals for howsufficient funds will be accumulated to meet the costs identified and setsout the guiding principles against which the Government will assess thefunding proposals submitted by nuclear operators for approval under theEnergy Bill.

7. The guidance flows from the clauses in the Energy Bill and can onlybe finalised after Royal Assent of the Bill. The consultation on draftguidance runs from today until 16 May 2008.

8. This guidance is statutory and will be laid before Parliament toensure transparency. As guidance it cannot compel, but taken together, it isintended to set out the matters which the Secretary of State may take intoaccount in determining whether to approve or approve with modifications, ormodify a Funded Decommissioning Programme.

9. This guidance is expected to be of interest to nuclear operators asthey will be responsible for submitting Funded Decommissioning Programmes,ensuring that financial security is provided, and, taking the technicalsteps set out in the approved Funded Decommissioning Programme as necessary.The guidance is also expected to be of interest to other stakeholders,including environmental organisations, investors, regulatory and consumerbodies and local communities.

10. Dr Tim Stone, a senior financier with experience of major capitalinvestment projects, was appointed in January 2007 to advise the Secretaryof State for BERR and the Chief Secretary to the Treasury on financing thecosts of decommissioning, waste management and waste disposal for newnuclear power stations. The clauses in the Bill and the draft guidancepublished today for consultation are the result of this work.

11. Full documents are available for comment at http://www.berr.gov.uk

12. The Department for Business Enterprise and Regulatory Reform helpsUK business succeed in an increasingly competitive world. It promotesbusiness growth and a strong enterprise economy, leads the better regulationagenda and champions free and fair markets. It is the shareholder in anumber of Government-owned assets and it

M2 Communications Ltd disclaims all liability for information providedwithin M2 PressWIRE. Data supplied by named party/parties. Furtherinformation on M2 PressWIRE can be obtained at http://www.presswire.net onthe world wide web. Inquiries to info@m2.com.

Areva achieves carbon neutral statusFeb 22, 2008 -- Datamonitor
French power group Areva has achieved carbon neutrality and hasemitted less than one million metric tons of CO2 equivalent in 2007.

The company said that this was possible through an emission reductioninitiative in addition to the type of processes used in Areva's industrialactivities that generate little CO2. To make up for its share of unavoidableemissions, the firm bought CO2 credits on the market.

In order to prolong this compensation initiative, Areva isco-operating with EcoAct, with a view to selecting and supportingenvironmental projects of benefit to the local populations in countrieswhere the group has offices.

These include building refrigerated warehouses with no dieselgenerator sets in Niger, providing the Brazilian ceramics industry withbiomass and replacing coal by natural gas in a Chinese thermal plant, thecompany said.

Guy Bousquet, senior vice president, sustainable development andcontinuous improvement, said: "Areva is one of the only industrial groups toachieve carbon neutrality. This is not to be underestimated. Not only doesour offer contribute to the fight against climate change but so do ourindustrial activities."

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