Nuclear Electric up by 37%: Operating profit of pounds 661m is entirely due to subsidy

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NUCLEAR Electric, the heavily subsidised state-owned generator, increased its operating profits by 37 per cent to pounds 661m last year.

But the profits were entirely due to the pounds 1.28bn subsidy raised from a levy on electricity bills and designed to fund the costs of decommissioning power stations. Without the subsidy, Nuclear Electric would have made a net loss of pounds 619m. That would have been an improvement on the previous year's net loss of pounds 783m, however.

John Collier, chairman, said the company was nevertheless on target to be in profit in 1995/96. He called for the company to be transferred to the private sector, completing the privatisation of the electricity industry in England and Wales.

The company is awaiting the terms of the Government's planned review of investment prospects for the nuclear power industry and hopes this will raise the possibility of privatisation. However, it is believed that ministers have yet to decide whether a sell-off should fall within the scope of the review.

Nuclear Electric increased its share of the electricity generating market in England and Wales by 3 per cent to 21.6 per cent in the year to 31 March. The company expects to overtake PowerGen as the second largest generator within three to four years.

Income from electricity sales was pounds 1.4bn, with the levy bringing total turnover to pounds 2.7bn, compared with pounds 2.4bn the previous year. Operating costs were just over pounds 2bn, up from pounds 1.95bn a year earlier.

The company remains technically insolvent, with total liabilities of pounds 10.4bn related to decommissioning of power stations and the management and disposal of nuclear material. Of that, more than pounds 8bn is related to the activities of the former Central Electricity Generating Board.