Commentary: Myths from the nuclear sector

Had visitors from Mars dropped in on yesterday's Nuclear Electric results, they could have been forgiven for assuming that they were listening to a private company.

Profits up by nearly half, productivity improved by 24 per cent, operating costs down by 22 per cent and a pounds 250m provision to cover 3,500 redundancies. The stuff of a tightly run commercial utility.

Sadly, this, as we earthlings know, is pure poppycock. Nuclear Electric is state-owned. It is also light years from operating in a commercial environment for two simple reasons. First, its customers must, by law, consume all the power it produces. Second, because nuclear electricity remains hopelessly uneconomic to generate, they must also pay an 11 per cent levy on their electricity bills for the privilege.

Given that Nuclear Electric made operating profits of pounds 482m last year, it seems not unreasonable to ask whether such a high levy, or any levy at all, remains justified.

The Government says it is if Britain wants to maintain a healthy diversity of electricity supplies. John Collier, chairman, justifies the levy on the grounds that someone has to pay for the company's pounds 8bn worth of decommissioning and waste management liabilities.

He adds, however, that his goal is to report an operating profit, without the artifical crutch of the levy, in 1995 - a hint that Nuclear Electric may one day follow its fossil-fuel friends into the private sector.

If it is serious about becoming commercial, it should try shaving the levy and delivering cheaper power to Britain's energy-intensive industries.

Even then, privatisation will surely remain science fiction. The private sector showed three years ago that it would not assume the liabilities without an astronomic cheque from the taxpayer. Three years hence, Nuclear Electric is just as much in alien territory. As Captain Collier might say, Beam me up, Scottie.