Not passing on savings from reactors to be decommissioned to customers

June 7, 2015

Five utilities still booking costs for retired reactors

http://www.japantimes.co.jp/news/2015/06/07/national/five-utilities-still-booking-costs-for-retired-reactors/#.VXRfk0bwmos

JIJI

Five of the nation’s major power utilities are still factoring in expenditures for reactors due to be decommissioned when calculating their prices, and delaying the return of savings to customers, Jiji Press has found.

Thus, the electricity bills issued by Tokyo Electric Power Co. and its counterparts in the Chubu, Hokuriku, Chugoku and Kyushu regions include fees for idle nuclear reactors, including maintenance, sources said.

In contrast, Kansai Electric Power Co. narrowed the size of its price hike to account for a drop in reactor-related costs.

According to Tepco, which decided in January last year to scrap the No. 5 and No. 6 reactors at the crippled Fukushima No. 1 plant, its power rates are based partly on nonexistent costs, such as those related to the two scrapped units.

Reducing costs allows a utility to cut rates if it reports them to the industry ministry, though Tepco has no plan to do so now, officials said.

Chubu Electric, which in March saw the No. 1 reactor at Japan Atomic Power Co.’s Tsuruga plant in Fukui Prefecture slated for decommissioning, has seen its payments for buying electricity from the reactor fall.

Chubu Electric, however, also has no immediate plans to pass the savings on to customers, the utility said.

Hokuriku Electric, which also bought electricity from the Tsuruga plant, has maintained the same rate calculation framework as before the decommissioning decision. The same with Chugoku Electric and Kyushu Electric, which have decided to decommission the No. 1 reactor at the Shimane plant in Matsue and the No. 1 reactor at the Genkai plant in Saga Prefecture, respectively.

Utilities are not required to immediately reflect savings from reactor decommissioning in their power bills.

The five utilities have not clarified their savings from the decommissioned reactors, but said the surge in thermal power generation costs caused by the March 2011 Fukushima disaster has had a greater financial impact.

Kansai Electric, which raised rates in June, slashed the margin of that hike by ¥9.6 billion per year after taking into account the decommissioning of the No. 1 and No. 2 reactors at Fukui Prefecture’s Mihama nuclear plant, and of the Tsuruga reactor.

Kepco had been paying ¥8.4 billion a year to purchase electricity from the Tsuruga reactor and ¥2.2 billion to finance repair costs for the two Mihama reactors.