July 13, 2016 2:00 am JST

Japan court again blocks restart of 2 nuclear reactors

The Nos. 3 and 4 reactors at the Takahama nuclear power plant.

OSAKA -- Handed another defeat by a Japanese court on Tuesday, Kansai Electric Power likely will not be able to run any of its nuclear power plants for at least six months, a major setback for a utility facing intense competition from industry newcomers.

The Otsu District Court in Shiga Prefecture rejected the company's objection to an injunction issued in March that suspended operation of the Nos. 3 and 4 reactors at the Takahama nuclear plant in neighboring Fukui Prefecture. The presiding judge was the same as when the injunction was issued.

Expecting this outcome, Kansai Electric has already started removing nuclear fuel from the two reactors.

The Osaka-based company had been banking on the restart of nuclear power stations for an earnings recovery. Its medium-term business plan released in April set a pretax profit target of 300 billion yen ($2.87 billion) on the assumption that most of its nuclear reactors will be back online by fiscal 2025.

Assuming that its earnings would improve by about 10 billion yen a month if the two Takahama reactors went back onstream, Kansai Electric had intended to lower its power rates to compete on a better footing with newcomers expected to enter the market following deregulation in April. But it was forced to scrap its plan to cut rates after the court ordered the two reactors -- reactivated in January and February -- shut down in March.

Since April, Kansai Electric has lost more than 200,000 customers to Osaka Gas and other power providers. "We will do everything we can [to restart] the Takahama Nos. 3 and 4 reactors and the Oi Nos. 3 and 4 reactors, and will lower rates if they can be restarted," Kansai Electric President Shigeki Iwane told a news conference at the end of June.

The utility's reactors besides the Takahama Nos. 3 and 4 units cannot be reactivated anytime soon because safety measures have to be implemented and Nuclear Regulation Authority safety screenings passed. And Kansai Electric's appeal of the order to halt the Takahama reactors may not be heard until early next year, so the utility likely will have no nuclear power sources for six months or longer.

Kansai Electric did post a net profit for the year ended March 31 thanks to a drop in the price of fuel used in fossil-fuel-burning power plants. But there is no guarantee that fuel prices will remain low. Nuclear power is an important source of electricity for the company, so its business will remain unstable until it can get its reactors online again.

(Nikkei)

The Kansai Electric Power Co., Inc.

Japan

Market(Ticker): TKS(9503)
Sector:
Industry:
Utilities
Electric Utilities
Market cap(USD): 12,970.7M
Shares: 938.73M

Osaka Gas Co., Ltd.

Japan

Market(Ticker): TKS(9532)
Sector:
Industry:
Utilities
Gas Distributors
Market cap(USD): 7,857.07M
Shares: 2,083.4M

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