Special Administration Regime
The RAB model requires suppliers to contribute to the funding of new nuclear projects from the start of construction and likely through to most of operational life, thus reducing the project’s cost of capital. It is expected that these costs will be passed on to consumers. To protect the interests of consumers, the legislation introduces a Special Administration Regime to apply to these projects.
	This provides the Secretary of State, or the Authority, with the Secretary of State’s permission, with a power to apply to the courts for the appointment of a special administrator (a ‘nuclear administrator’) in certain circumstances, including the very unlikely scenario of an economically regulated nuclear company’s (a ‘relevant licensee nuclear company’) insolvency. The objective of a special administration order (a ‘RLNC administration order’) would be to complete construction and/or keep the plant running, until it is no longer necessary for the order to remain in force.
	Implementing special administration is intended to reduce the risks of consumers being deprived of the intended benefits from funding the building of a nuclear power plant using a RAB model should a relevant licensee nuclear company become insolvent. It also reduces the risk of requiring a replacement source of electricity generation, which could further increase the cost of electricity to consumers.
	Where rescue cannot be achieved and it is unnecessary for the RLNC administration order to remain in place, the Secretary of State, the Authority or the nuclear administrator with the consent of the Secretary of State, may apply to the courts to bring the RLNC administration to an end. The circumstances where those persons may apply to end the appointment of the administrator include where the objective of the RLNC administration cannot be met. It is considered that once the administration has ended, the Secretary of State may prepare a Nuclear Transfer Scheme where the nuclear installation and/or site is to be decommissioned or cleaned up. This would bring the plant under the control of a public body, or to the Nuclear Decommissioning Authority (NDA) or a publicly owned company who would be responsible for decommissioning the plant.
	The Secretary of State can provide financial assistance in connection with a RLNC administration order for the purposes of achieving the objective of the RLNC administration order. It is expected that the Secretary of State would make provision in the licence of a relevant licensee nuclear company for the purposes of raising the funds to cover costs which would arise in connection with a RLNC administration order.