Japanese Government Mulling Intervention as TEPCO Fails to React

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Tokyo Electric Power Co. will consider canceling the construction of new thermal power plants and selling some existing ones to secure compensation funds for the crisis at the Fukushima No. 1 nuclear power plant, it has been learned.

But the utility admits only some of the money will also be used to decommission the nuclear plant, which was crippled by the March 11 disaster.

Before the Fukushima disaster, the government’s Agency for Natural Resources and Energy estimated that it would cost 65.9 billion yen to dispose of a single boiling water reactor with an output of 1.1 million kilowatts like those of the Fukushima No. 1 plant, and 3 trillion yen for all of the nation’s 54 such reactors.

However, after the disaster, a private think tank estimated that disposal of the Fukushima No. 1 plant reactors would cost up to 20 trillion yen over the course of 10 years.


The government has already extended 890 billion yen in financial assistance to TEPCO via the Nuclear Damage Liability Facilitation Fund to help the utility pay damages to those affected by the nuclear crisis. However, the utility is strictly prohibited from diverting any of the money to purposes other than compensation payments.

While reducing its own electricity generating capacity, TEPCO plans to buy power from factories with generating facilities through open bids, according to informed sources.

TEPCO President Nishizawa,  said that although the government is asking TEPCO to submit by mid-December mid- and long-term roadmaps for the disposal of the nuclear reactors, there is no estimation yet of the large funds necessary for the disposal.

TEPCO has been strongly urging the government to grant it permission to raise its electric power bills and resume operations at nuclear power plants suspended for trouble or regular inspections.

A government third-party committee estimates that it will cost TEPCO approximately 1.15 trillion yen to decommission and dismantle the crippled No. 1 to 4 reactors at the Fukushima No. 1 Nuclear Power Plant. The amount is expected to sharply increase if the plant’s No. 5 and 6 reactors that remain intact are also done away with.

Currently, no one can see inside the reactors to confirm how the nuclear fuel inside melted, and depending on the condition of the fuel, the time and costs of disposing of the reactors could increase.

A top TEPCO official said, “We don’t know how much it will cost in the end. It could end up costing trillions of yen.”

The Tokyo-based utility has been too financially strapped to build a new plant because it has been unable to issue corporate bonds since the accident at the Fukushima plant, the sources said.

TEPCO is moving ahead with a plan to build three or four thermal power-generating units, including one at its Hitachinaka thermal station in Ibaraki Prefecture, and have them fully operational by fiscal 2020.

  TEPCO has strongly resisted any move to split it, a fierce tug-of-war between the utility and the government is expected after the New Year’s period.


TEPCO is aiming to dispose of its assets, slash its personnel expenses, sharply raise its electricity charges and resume operations at its Kashiwazaki-Kariwa Nuclear Power Plant in Niigata Prefecture amid desperate efforts to secure enough profits to cover such expenses.

However, Economy, Trade and Industry Minister Yukio Edano, the regulator of the electric power industry, has voiced opposition to any electricity charge hike and reactivation of the Kashiwazaki-Kariwa nuclear plant.


Although fuel costs are placing pressure on the company’s finances, Tokyo Electric Power Co. (TEPCO) President Toshio Nishizawa indicated in an interview with the Mainichi Shimbun on Dec. 7 that to get the Fukushima No. 1 Nuclear Power Plant under control, the company will undergo streamlining measures.

He also said that due to the large number of people eligible to receive compensation payments, TEPCO wants administrative help from the national and local governments in processing those payments.


In this March 20, 2011 aerial file photo taken by a small unmanned drone and released by Air Photo Service, the crippled Fukushima No. 1 Nuclear Power Plant is seen in Okumamachi, Fukushima prefecture. From top to bottom: Unit 1, Unit 2, Unit 3 and Unit 4.  (AP Photo/Air Photo Service)Regarding compensation payments to those affected by the nuclear disaster, Nishizawa said, “Those applicable for receiving payments are said to be as many as 1.5 million, too many for TEPCO to manage alone.”

To manage the massive amount of administrative work accompanying the payments, help from local municipal governments will be necessary.

“We are also talking with the national government,” said Nishizawa. However, he also said, “I cannot say anything specific about the time of payments or other details.


There is controversy over whether TEPCO will raise electricity rates to cover costs, but on that Nishizawa only said, “It is one option.” There are views amongst national government officials that if rates are not raised then public funds will have to be used, but Nishizawa was downplaying the possibility, saying that “A one-time payment from the government is meaningless.”

TEPCO will decide by the end of March which of its 15 operating thermal stations will be sold. The plants, including facilities in Yokohama and Futtsu, Chiba Prefecture, will be judged on technical issues and economic efficiency, the sources said.

Following the sell-off, the utility will procure electricity from the so-called independent power producers (IPPs). Details of the bidding process will be decided by the end of January.

TEPCO bought electricity from IPPs from 1996 to 1999. From 2000 until recently, however, TEPCO did not buy electricity from IPPs, which discouraged new players from entering the power-generation business. But with its nuclear power plants shut down since the Great East Japan Earthquake, TEPCO has bought more power from IPPs.

Under this restructuring plan, the company will not recruit new graduates and will solicit voluntary retirements from staff who have been at the utility for many years. TEPCO also plans to cut corporate pension benefits for retirees by up to 4.25 percent starting in October 2012.

Source: Yomiuri

Source: Yomiuri 

Source: Yomiuri

Source: Mainichi


Source: Mainichi

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