The case goes back a long way. It started just a decade ago. The Government of Mariano Rajoy created in 2012 a specific tax to tax radioactive waste and spent fuel generated by nuclear power plants. A new tax that came to feed the hard clash between the Executive and the electricity companiesdue to the cuts of the electricity reform undertaken in the midst of the economic crisis.
The large electricity companies that own the nuclear power plants (Iberdrola, Endesa, Naturgy and EDP) have been trying for almost a decade in the courts to annul the tax on the grounds that it is unconstitutional and contrary to European Union law. In June last year, the Supreme Court dismissed the appeals of the electricity companies and upheld the legality of the tax. After that failure, they are beginning to compensate themselves.
The energy companies did not manage to completely overturn the tax, but they have won the fight with the Tax Agency on how to apply the tax, which is resulting in millionaire refunds of part of the money paid. The Central Economic-Administrative Court has ruled in favor of the energy companies in their claim to reduce the amount of spent fuel to which the tax can be applied and the Tax Agency has already begun to approve conformity reports to execute refunds to each of the nuclear power plants.
The Treasury has already approved the partial refund of taxes from previous years for the Trillo, Almaraz and Cofrentes plants, and the reversion of part of the payments for the Ascó and Vandellós plants is pending approval, according to sources in the electricity sector confirmed to El Periódico de España. Neither the energy companies nor the Tax Agency disclose the total amount requested or the amount actually returned, but from the nuclear sector they point out that the refunds may end up being around 100 million euros.
Endesa's financial results for the first nine months of this year confirm an injection of 16 million euros in refunds for the Trillo (in which the company only has a 1% stake) and Almaraz (in which it controls only 36%) plants, in which Iberdrola is the main shareholder and in which Naturgy has a minority stake. Iberdrola recognizes that its accounts up to September include the impact of the nuclear tax refund, but does not disaggregate the specific amount of the reversion corresponding to Trillo, Almaraz and Cofrentes, in which it is the majority shareholder.
Only for the time of use
The tax imposes a levy on spent nuclear fuel (uranium and plutonium) and on the waste generated by the electricity production of nuclear plants when the rods are definitively extracted from the reactor. Rajoy's own government introduced a legal change so that the electricity companies would not pay the tax for the fuel that was in the reactors prior to January 1, 2013, the date on which the tax came into force.
An emergency legal reform that sought that the tax would not have retroactive effects and that was approved after Endesa and Iberdrola unilaterally paralyzed at the end of 2012 the operations of the Garoña nuclear power plant and removed all the fuel from the reactor precisely to avoid paying the new tax before its entry into force. However, that reform did not take into account that nuclear power plants commonly remove fuel rods from the reactor to store them in their storage pools, but subsequently reuse it by placing it back into the reactor to continue producing electricity.
The large electricity companies found that the Tax Agency imposed on them the payment of the amounts of this tax calculated as if the nuclear fuel had been used permanently during all the years in an interrupted manner and not only during alternate periods, which would substantially reduce the amount of the payments.
The nuclear companies had requested a substantial reduction of the payments, especially for the years 2017 and 2018, to pay the tax only for the exact days in which the fuel was inside the reactor. The Central Economic-Administrative Court has ended up giving them the reason and the Tax Agency is proceeding with the refunds after five years of claims by the energy groups.