Sellafield owners may sue for £100m bill

SELLAFIELD owner British Nuclear Fuels Limited (BNFL) is threatening to sue ailing nuclear power producer British Energy over stg£100 million (€158.7m) in unpaid bills according to industry sources.

The bills are for reprocessing carried out by BNFL for British Energy, which is Britain's power producer, supplying about a quarter of the country's energy needs.

British Energy warned in September it could go bust because of a steep fall in power prices that followed liberalisation of the energy market, prompting a stg£650 million bail-out by the British government.

The company now has until November 29 to hammer out a recovery plan with the government and creditors such as BNFL.

"There's a short-term issue, which is the stg£100 million and there's a long-term issue, which is the nature of the reprocessing contract between BNFL and British Energy. The two things have got rather caught up together which is why the money hasn't been paid," said the industry source.

A spokesman for British Energy declined to comment on the threat of legal action. The industry source said British Energy could pay the money out of the funds provided by the British government, but that it was hoping for the debt to be recalculated as part of a more favourable new deal.

The dispute was likely to be resolved, not least because BNFL is owned by the government which is deeply involved in trying to rescue British Energy, the source added. But for the time being, there were no signs of agreement.

British Energy is currently selling power for less than it costs to generate it. Unlike other large producers, it has no retail customer base to balance the effect, and unlike other types of generator its reactors cannot be shut off when prices are low.