German legal case sets precedent for limiting the greed of nuclear and coal companies

Limiting the greed of the nuclear industry http://www.dw.com/en/opinion-limiting-the-greed-of-the-nuclear-industry/a-36664176 The German Constitutional Court’s decision that an accelerated nuclear phase-out is legal, and limiting compensation for energy companies is good news, says DW’s Gero Reuter. This could even set a precedent for coal.

“Property entails obligations. Its use shall also serve the public good,” states article 14 of the German constitution. At the same time, the German constitution demands that expropriation is permissible for the public good, and will be compensated after balancing the interests of everyone affected.

That’s the most crucial background to Germany’s biggest power companies – Eon, RWE and Swedish state-owned company Vattenfall – having filed lawsuits against the German government. They asked for compensation for the government’s decision in 2011 to hurry through shutdown of nuclear reactors in the wake of the 2011 nuclear meltdown at Japan’s Fukushima reactor.

According to the energy companies, the nuclear phase-out is an unconstitutional expropriation of their power plants and possible energy production. They had asked for compensation of around 19 billion euros ($20 billion), which was supposed to be shelled out by taxpayers – around 230 euros from each citizen, babies to pensioners.

This week, Germany’s Constitutional Court mostly rejected their claims, saying the law for a nuclear phase-out from 2011 “is mostly compatible with Germany’s constitution.”

Only long-term investments that the power companies made between December 2010 and March 2011 are eligible for compensation, the court ruled, as the German government agreed to a maximum lifetime extension of nuclear power plants for 12 years in 2010.

What’s more, Germany’s Constitutional Court said some of the power companies received unequal treatment, and thus ruled that the German government has to adjust the law accordingly by June 2018.

Good news for taxpayers and the environment

The ruling is good news for taxpayers and the environment, as it will limit the greed of power companies to tap even more subsidies at the expense of public health, the environment and government budgets.

As to the requested compensation costs of around 19 billion euros – fortunately there’s not much left to this argument. It’s possible that the German government won’t have to pay anything to the energy companies at all. If worse comes to worse, it may pay a billion euros. This all depends on how the state will define unequal treatment of the different energy companies over the months to come.

What’s even more positive and groundbreaking is the legal reasoning behind the ruling. Germany’s Constitutional Court stressed several times that it attaches great importance to the protection of life, health and natural resources, and to the minimization of risks through the use of nuclear energy. It also said this could lead to an even faster nuclear phase-out, and that the German government could change its laws after the fact.

Thinking into the future, this decision could set a precedent for legal support to Germany being on the necessary path to withdraw from coal-powered electricity, and to shorten the long-term operating licenses power companies retain for mining lignite (brown coal).

The energy companies should carefully study this decision, and read between the lines to see how the German constitution truly works. “Property entails obligations. Its use shall also serve the public good.”

And if companies don’t use their property for the public good, then the state can expropriate this under certain circumstances. Obviously, the state then has to pay an appropriate compensation fee after balancing the interests of everyone involved – that’s fair.

But it should pay only what’s fair and not a cent more – especially not for big, powerful energy companies.