Recommendation 15

The assets of the Fund have been created from the contributions made by the station operators, income from investments, capital injections from government and the proceeds from the sale of the Fund’s shares in British Energy. Despite EDFE extending the operating lives of all the AGR stations, its financial contributions to the Fund were agreed at the time of the sale of British Energy to EDFE in 2009. The deal the Department 18 C&AG’s Report, paras 2.5–2.7, 2.9–2.14 19 Q 40; C&AG’s report para 2.22 20 C&AG’s Report, para 2.23 21 Qq 74, 85 22 Qq 40, 61 23 Q 85; C&AG’s report para 4.11 24 Qq 31–33, C&AG’s Report para 3.6 The future of the Advanced Gas-cooled Reactors 13 negotiated did not include the option to increase or extend the contributions made by the operator. We asked the Department if there were any circumstances in which station operators could be expected to increase their contributions to the Fund. The Department told us that it was not aware of any circumstances where this would be the case for AGR stations. It explained that it could have structured the 2009 deal differently and could have asked EDFE to increase its contributions over time, but that would have increased uncertainty and risk for EDFE and might have affected the sale value. It noted that EDFE had paid £12.5 billion for the AGR stations, and it was logical to assume that it might have paid less under a different agreement.25 The NAO found that the main focus of the sale of British Energy had been on continuing operations, with less consideration given to decommissioning.26