Estimating decommissioning costs has serious flaws

October 27, 2016

EDITORIAL: Cost estimate needed first to decommission Fukushima plant

http://www.asahi.com/ajw/articles/AJ201610270028.html

An industry ministry panel of experts is tackling two key questions concerning the decommissioning of the crippled Fukushima No. 1 nuclear power plant.

One is how much money will be needed to decommission the plant’s reactors, three of which melted down. The other is who should foot the bill and how.

However, there are some serious flaws in the way the expert panel is working on these knotty questions, which could lead to a huge financial burden on the public.

First of all, the panel’s meetings are not open to the public. The main points of the discussions are published later, but many details, including who made specific remarks, are omitted.

The fate of Tokyo Electric Power Co., which operates the Fukushima plant and is responsible for its decommissioning, will be largely determined by whether it can restart its Kashiwazaki-Kariwa nuclear power plant in Niigata Prefecture.

Panel members include many business leaders who have been promoting nuclear power generation.

The outcome of the recent Niigata gubernatorial election underscored the strong opposition of local residents against TEPCO’s plan to bring the plant back online.

The panel’s lineup raises concerns that its discussions may be based on the assumption that the Kashiwazaki-Kariwa nuclear plant will eventually be restarted, despite the situation in the prefecture.

Another troubling fact is that the government has yet to announce any estimate of the total decommissioning cost.

In the panel’s first meeting, some members urged the government to swiftly present an estimate of the cost. In the second meeting, however, the Ministry of Economy, Trade and Industry only said that annual spending could grow to several hundreds of billions of yen from about 80 billion yen ($703 million) spent now.

The ministry says a specific estimate of the total cost will be announced as early as the end of the year, along with a plan for management reforms at TEPCO and a package of related measures the government will take.

But this timetable doesn’t make sense. Pinning down the overall decommissioning cost should be the starting point for the panel’s discussions.

With the conditions of the melted nuclear fuel remaining unclear, it is certainly difficult to accurately estimate the cost.

Still, an estimate should first be shown to ensure substantive debate on whether the method used for the work is appropriate and whether there are ways to curb the cost.

As for financing, the panel has supported the proposal that TEPCO should secure the necessary funds on its own through management reform over other options, such as the utility’s liquidation involving debt forgiveness by its creditors, tax financing by the government and a continuation of the current state control of TEPCO.

In an apparent attempt to stress the importance of TEPCO’s own efforts to save itself, the panel has also recommended that the Kashiwazaki-Kariwa nuclear plant should be spun off from TEPCO and integrated with the nuclear power business of another utility.

There is no disputing that TEPCO should push through thorough management reforms to prevent the public from shouldering part of the cost through tax financing or hikes in electricity rates.

The question, however, is whether the embattled utility’s own efforts will be enough to cover the entire decommissioning cost, expected to reach several trillions of yen.

If a plan based on the company’s own efforts fails and disrupts the decommissioning process, the reconstruction of disaster-hit areas in Fukushima Prefecture could be seriously delayed.

It is vital for the panel to win broad public support for its proposals on the national challenge of decommissioning the Fukushima No. 1 nuclear power plant.

This requires careful, exhaustive and reasonable debate, open to the public, on the cost and the financing method.

--The Asahi Shimbun, Oct. 27