Various ways to look at things (3)

April 15, 2015

Court decision on Takahama reactors throws cold water on gov't nuclear policy

http://mainichi.jp/english/english/perspectives/news/20150415p2a00m0na002000c.html

The injunction issued by the Fukui District Court on April 14 to prevent the restart of two reactors at the Takahama Nuclear Power Plant has poured cold water on the government's efforts to return to atomic energy.

Officials of Kansai Electric Power Co. (KEPCO), the operator of the Takahama plant in Fukui Prefecture, were shocked and disappointed to learn of the court decision, with one senior official saying, "We have plunged into an uncertain extended game."

For KEPCO, which had relied on nuclear reactors for about 50 percent of its total power generation before the Fukushima nuclear crisis, the restart of the No. 3 and 4 reactors at the power station was a trump card to pull the utility out of the red. In December last year, KEPCO applied to the Ministry of Economy, Trade and Industry for approval to raise its electricity rates for households by an average of 10.23 percent -- its second rate increase since the outbreak of the Fukushima nuclear crisis.

The utility had developed a scenario in which it would move into the black in fiscal 2015 by raising its electricity rates again in the first half of fiscal 2015 and restarting the Takahama nuclear reactors as early as November this year. The 10.23 percent increase in electricity rates for households was based on the assumption that the Takahama reactors would be reactivated as planned. The temporary injunction order issued by the Fukui District Court has made it difficult to foresee whether the reactors will be restarted in the future, quickly blurring the utility's scenario to achieve profitability.

KEPCO is expected to post its fourth consecutive deficit in fiscal 2014 due to the prolonged shutdown of its reactors. Its total debt for the four-year period is forecast to reach over 700 billion yen. If the utility continues to post a deficit in fiscal 2015, concerns would grow about the possibility of the company falling into a state of insolvency with its debts exceeding its assets. KEPCO President Makoto Yagi said, "It is a situation that shakes the continued existence of our company."

A senior KEPCO official said, "We want to manage to secure a surplus by cutting costs and other means." But Kansai Electric's banks could harden their stance toward lending, forcing the utility to move ahead with recapitalization and raise its electricity rates over and over again.

The latest court decision has also poured cold water on the government which has been pushing for the early restart of the country's nuclear plants in a bid to return to atomic energy.

Seven major utilities in the country raised their electricity rates as fuel costs for thermal power generation increased due to the prolonged shutdown of their nuclear reactors. The electricity rates for industrial use have risen 30 percent since the outbreak of the Fukushima nuclear crisis, while those for households have increased 20 percent. The government had thought that it would need to ensure economic recovery by keeping electricity rates low through the early reactivation of nuclear reactors. As part of the scenario, the government called attention to the safety of nuclear power generation by describing the Nuclear Regulation Authority's new regulation standards as the "world's highest level" and laid the groundwork for the early reactivation of nuclear reactors.

One year and nine months have passed since the NRA started screening reactors for restart, and the No. 1 and 2 reactors at the Sendai Nuclear Power Plant operated by Kyushu Electric Power Co. are expected to be reactivated as early as this summer. However, a court decision is scheduled to be made on April 22 on whether to issue an injunction order to ban the utility from restarting the two reactors. Kyushu Electric is also aiming to avert its fifth consecutive deficit by restarting its reactors. A Kyushu Electric official said, "We hope the Fukui District Court's decision to issue the injunction will not affect us."

The government maintains its stance to press for the early restart of the country's nuclear reactors, as Chief Cabinet Secretary Yoshihide Suga said the latest court decision was nothing but a "provisional ruling." But applications for injunction orders are expected to be filed one after another by citizens to prevent nuclear reactors across the country from being restarted. A senior industry ministry official said, "Economic recovery will be hampered if a restart of nuclear reactors is delayed by judicial rulings." Nevertheless, the problem seems to lie in the fact that the government has been reluctant to take measures swiftly to break with nuclear power generation.