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New utilities to share cost of Fukushima compensation

November 2, 2016

New utilities may have to chip in for Fukushima compensation costs




The industry ministry is planning to demand that new power industry entrants shoulder a portion of the compensation payments stemming from the crisis at the Fukushima No. 1 nuclear plant and to do the same for any future nuclear accidents, sources said Wednesday.

The Ministry of Economy, Trade and Industry also intends to introduce a system to allow Tokyo Electric Power Company Holdings Inc. to steadily accumulate funds necessary for decommissioning Fukushima No. 1, the sources said.

Since the system allows Tepco to effectively pass on the decommissioning cost in utility bills, METI’s plan means the burden of the nuclear crisis aftermath will be shouldered by new utilities and by power users in the form of higher bills or reduced price cuts.

The amount of damages payments to those affected by the Fukushima crisis has already eclipsed ¥6 trillion. The cost of scrapping the plant is expected to far exceed the initially estimated ¥2 trillion.

Under the current system, Tepco must lower its transmission and distribution fees when it makes a profit above a certain level. But under the envisaged system, part of that excess profit will go to the fund for scrapping Fukushima No. 1 and not returned to the users.

METI, which says users should shoulder their share of the burden as they have widely benefited from nuclear power, plans to submit its proposals to a government working group discussing the matter.

So far, Tepco and 10 other conventional utilities are paying for the compensation by making general contributions to the Nuclear Damage Compensation and Decommissioning Facilitation Corp., a fund set up in the wake of the Fukushima crisis.

New utilities that joined the industry after Japan’s liberalization of retail electricity market in April have not made such payments.

The conventional utilities, which have been less price-competitive than new players due to their need to reflect the Fukushima expenses in their bills, have been seeking to raise their transmission and distribution fees for the newcomers that use their infrastructure to make them shoulder the costs as well.


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