Overview

This bill establishes a Regulated Asset Base (RAB) model for financing new nuclear power plants in the UK. It creates a framework for managing the financial risks associated with these large-scale projects, ensuring their construction and operation, and defining procedures for revenue collection and a special administration regime if necessary.

Description

The bill is structured into four parts. Part 1 establishes the RAB model, designating specific nuclear companies and modifying their licenses to allow for regulated revenue streams. This includes setting "allowed revenue" and procedures for appeals to the Competition and Markets Authority (CMA). Part 2 details the creation of revenue collection contracts, involving a designated counterparty to collect payments from electricity suppliers to fund the projects. Part 3 establishes a special administration regime for designated companies facing financial difficulties, using some existing insolvency legislation. Part 4 includes miscellaneous provisions, most significantly amending the definition of "associated" companies in relation to decommissioning funding to exclude certain financial stakeholders. This could potentially lead to a more accurate representation of costs for decommissioning.

Government Spending

The bill does not specify exact figures for government spending. However, Part 4, Section 41, indicates that any expenditure incurred by the Secretary of State, the CMA, or the Gas and Electricity Markets Authority (Authority) by virtue of this Act, or any increase in expenditure under other Acts resulting from this Act, will be paid out of money provided by Parliament. This implies significant government financial commitment for the scheme. This would include the potential for providing financial assistance (grants, loans, guarantees or indemnities) to the revenue collection counterparty and to the nuclear companies themselves.

Groups Affected

• Nuclear Companies: The bill directly affects companies developing new nuclear power plants; it will impact their financing, licensing, and operating procedures.
• Electricity Suppliers: They will be required to contribute funds towards the construction and operation of new nuclear plants through payments to a designated revenue collection counterparty.
• Consumers: The cost of electricity might be affected, both positively (via new power generation), and negatively (through the potential cost of the RAB model passed to consumers via bills).
• Government: Significant financial implications through direct and indirect costs are expected.
• Regulators (CMA, Authority, Office for Nuclear Regulation, Environment Agency): Their roles and responsibilities will be redefined and expanded by the bill.

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