31. Provisions for risks and charges - €8,047 million

Millions of euro  Taken to income statement Utilization   
 at Dec. 31, 2012 restated   at Dec. 31, 2013 
     of which short term 
Provision for litigation, risks and other charges:           
- nuclear decommissioning  3,538  (23)  (821)  2,694  52 
- non-nuclear plant retirement and site restoration  615  (2)  (20)  593 
- litigation  1,142  115  (174)  1,083  46 
- environmental certificates charges  363  290  (356)  297  164 
- taxes and duties  411  14  (37)  388 
- other  1,273  422  (450)  1,245  633 
Total  7,342  816  (1,858)  6,300  905 
Provision for early-retirement incentives  1,306  958  (517)  1,747  588 
TOTAL  8,648  1,774  (2,375)  8,047  1,493 

Nuclear decommissioning provision

The nuclear decommissioning provision includes the following:

  • €2,175 million (€2,511 million at December 31, 2012) for the V1 and V2 plants at Jasklovske Bohunice and the EMO 1 and 2 plants at Mochovce, and also includes the provision for nuclear waste disposal in the amount of €114 million (same amount at December 31, 2012), the provision for spent nuclear fuel disposal in the amount of €1,296 million (€1,542 million at December 31, 2012) and the provision for nuclear plant retirement in the amount of €765 million (€855 million at December 31, 2012). The estimated timing of the outlays described above takes account of current knowledge of environmental regulations, the operating time used in estimating the costs, and the difficulties presented by the extremely long time span over which such costs could arise. The charges covered by the provisions are reported at their present value using discount rates of between 4.15% and 4.55%. The net decrease in 2013 amounted to €336 million, reflecting the change in the estimates of prices and quantities of certain types of radioactive waste and a new assessment of the estimated useful lives of certain components of the Jasklovske Bohunice and Mochovce plants. The decline was also affected by the adoption of a new decommissioning strategy, approved by the government on January 15, 2014, which provides for a more conservative approach that pays closer attention to technical, financial and safety issues, with the consequent discounting of the liability over a longer period;
  • €519 million (€1,027 million at December 31, 2012) for the costs that will be incurred at the time of decommissioning of nuclear plants by Enresa, a Spanish public enterprise responsible for such activities in accordance with Royal Decree 1349/03 and Law 24/2005. Quantification of the costs is based on the standard contract between Enresa and the electricity companies approved by the Ministry for the Economy in September 2001, which regulates the retirement and closing of nuclear power plants. The time horizon envisaged, three years, corresponds to the period from the termination of power generation to the transfer of plant management to Enresa (post-operational costs). The change for 2013, recognized as a decrease in the assets as provided for under IFRIC 1, reflects regulatory changes in Spain following the introduction of Law 16/2013, which modified the mechanism established the previous year with Law 15/2012, which had increased the burden on generators operating nuclear power plants.

Non-nuclear plant retirement and site restoration provision

The provision for “non-nuclear plant retirement and site restoration” represents the present value of the estimated cost for the retirement and removal of non-nuclear plants where there is a legal or constructive obligation to do so.

Litigation provision

The “litigation” provision covers contingent liabilities in respect of pending litigation and other disputes. It includes an estimate of the potential liability relating to disputes that arose during the period, as well as revised estimates of the potential costs associated with disputes initiated in prior periods. The estimates are based on the opinions of internal and external legal counsel.

Other provisions

Other provisions cover various risks and charges, mainly in connection with regulatory disputes and disputes with local authorities regarding various duties and fees. In particular, as regard current and potential disputes concerning local property tax (whether the Imposta Comunale sugli Immobili or “ICI” or the new Imposta Municipale Unica or “IMU”) in Italy, the Group has taken due account of the criteria introduced with circular 6 of the Public Land Agency (which resolved interpretive issues concerning the valuation methods for movable assets considered relevant for property registry purposes, including certain assets typical to generation plants, such as turbines) in estimating the liability for such taxes, both for the purposes of quantifying the probable risk associated with pending litigation and generating a reasonable valuation of probable future charges on positions that have not yet been assessed by Land Agency offices and municipalities.

Provision for early-retirement incentives

The provision for early-retirement incentives includes the estimated charges related to binding agreements for the voluntary termination of employment contracts in response to organizational needs. In addition to uses essentially associated with the early retirement provision (ERE) in Spain, the change for the year also reflects the liability of €800 million recognized at December 31, 2013 in respect of the union agreements signed on September 6, 2013, implementing, for a number of Italian companies, the mechanism provided for under Article 4, paragraphs 1-7-ter, of Law 92/2012 (the Fornero Act).