Bosses at Copeland council say they want to further interrogate the Government’s proposed model to fund new nuclear power developments before pledging their support.

Steven Morgan sounded a word of caution after the authority’s Strategic Nuclear and Energy Board, which he chairs, was asked to “support the principles” of the Government developing the Regulated Asset Base (RAB) model as a way to fund large power stations and support for the development of smaller and less expensive equivalents.

Mr Morgan also raised concerns that the model – which is intended to make it easier to attract private sector investment in new nuclear power stations – could see a hike in electricity bills for consumers.

Last month the Government began a four-month consultation on creating a RAB model for nuclear. It followed a year-long review by the Department for Business, Energy and Industrial Strategy after it was first floated as a way to support NuGen’s plans for Moorside.

Its introduction mid negotiation between NuGen owners Toshiba and Korean utility Kepco, appeared to cause delays which eventually led to the scrapping of the £15 billion project.

The model – which has already been used in the UK to finance electricity, gas, telecoms and transport infrastructure – sees a regulator set a fixed sum for the cost of a project along with a fix return for the project’s investors, paid for by the consumer.

But councillors said this could see taxpayers or ratepayers stumping up the cash for a new nuclear power station up to 15 years before it is built – and which, it was feared, might never be built.

Mr Morgan said he needed to know about the implications for the constituents of Copeland after the council’s nuclear programmes and project manager Steve Smith, asked the board to “support the principles” of developing the model.

The recommendation was to delegate the approval of a consultation response to the Government’s funding plan to the council’s chief executive Pat Graham and nuclear portfolio-holder Coun David Moore.

“One of the proposals is that the cost that is incurred during the construction goes into the rates, so you are paying for it long before it returns any electricity,” said Mr Morgan.

“This does reduce the financing cost and therefore reduces what you have to pay in the long-run but in the near term you are paying for plants that haven’t been built yet and may never be built.

“My only concern is, if you are asking us to sign a letter that essentially endorses a substantial increase in our electricity rates to pay for new nuclear power then that’s not something we should sleepwalk into.”
Mr Smith denied this meant he was asking the panel to endorse the Government’s funding model.

He said: “I’m proposing that we interrogate the RAB funding model in more detail and see whether it does say what it’s going to do on the tin, which is attract private capital finance for nuclear projects.”

Meanwhile, the nuclear sector, in the main is supportive of the adaptation of the RAB model to fund new developments.

Executive director of business membership organisation Britain’s Energy Coast Business Cluster, John Grainger, said it could “offer up secure investment opportunities to a range of potential investors” following the collapse of Moorside and the shelving of the Wylfa Newydd and Oldbury developments in Anglesey and Gloucestershire respectively.

However, some finance experts believe that adapting the RAB model to support new nuclear is still years from being completed.