ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronEye IconIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailMenu BurgerPositive ArrowIcon PrintIcon SearchSite TitleTitle ChevronIcon Twitter
Economy

Japan mulls having new utilities help pay Fukushima victims

The cost of scrapping Fukushima Daiichi will remain squarely on Tepco's shoulders.

TOKYO -- Japan is considering having new electricity suppliers shoulder some of the cost of compensating those affected by the 2011 Fukushima Daiichi meltdown -- a first since the market was opened up to companies besides the big regional utilities.

The expense has been covered by interest-free government loans to Tokyo Electric Power Co. Holdings, which operated the disaster-stricken nuclear plant. This debt is being repaid not only by Tepco, but also other major power companies such as Kansai Electric Power and Chubu Electric Power. Some 6 trillion yen ($57 billion) has already been paid out, more than the 5.4 trillion yen estimated in fiscal 2013, and the total is expected to rise by trillions of yen.

With consumers gradually switching from regional utilities to independent power providers, the Ministry of Economy, Trade and Industry plans to ask these new players to pay a share of the compensation. Details such as how to split the burden between established and new power providers will be worked out going forward. New suppliers' customers will be asked to contribute as well, on the grounds that they used nuclear power before the market opened up, though this could meet with a backlash from some of the companies affected.

But the cost of scrapping Fukushima Daiichi will remain squarely on Tepco's shoulders, and the ministry will not approve rate hikes to recoup these expenses. Annual outlays are expected to soar to hundreds of billions of yen, from 80 billion yen now, once Tepco starts extracting melted fuel from the reactors in the 2020s.

The ministry plans to set up a fund to cover decommissioning costs, with the money to come from Tepco's yearly profits. The utility will be permitted to draw from the fund to cover approved decommissioning plans. Funding gaps will be covered by government loans to be repaid by Tepco.

The company will be exempted for the time being from a requirement to cut electricity transmission charges levied on electricity retailers if profits from power transmission and distribution rise too high. The aim is to avoid placing a further burden on taxpayers while ensuring that decommissioning goes smoothly.

(Nikkei)

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Get Unlimited access

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends June 30th

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to the Nikkei Asian Review has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media