Gove't will helpmake up for losses if reliance on nuclear is reduced

August 10, 2012

Nuclear plant locales to get aid, Edano says

Kyodo

http://www.japantimes.co.jp/text/nn20120810a4.html

Industry minister Yukio Edano has expressed readiness to protect jobs in municipalities that host nuclear power plants when the government reduces the country's reliance on atomic energy.

He recently pointed to the possibility of using the communities as bases for other sources of energy production, given that they already have extensive power grids.

He also called on utilities to thoroughly restructure before applying for electricity rate increases amid the shutdown of most of the nation's nuclear reactors.

"If utilities that are paying a large amount of dividends say they want to raise rates for the dividend payment, I don't think that kind of proposal would gain user acceptance," the economy, trade and industry minister said.

While the government plans to decide soon how quickly to reduce the country's reliance on nuclear power following last year's Fukushima meltdowns, Edano said it would take into consideration, "as a matter of course," the negative impact that changes in energy policy might have on areas hosting nuclear plants.

"If nuclear power plants are decommissioned sooner than expected, we need to take steps to establish alternative businesses" in the municipalities that host them, he said.

"The areas (with nuclear plants) have some advantages, such as having strong power transmission networks," Edano said, noting the need to promote renewable energy, such as solar and wind power.

"So based on that, I think we can implement regional development measures in consultation with local authorities," he said, adding the government may also be able to support construction of highly efficient natural gas thermal power plants in such areas.

While the government is currently assessing public opinion on Japan's future energy mix, Edano said he acknowledges that "on the whole, there are many citizens who want to abolish nuclear power, if possible. . . . We need to make a decision based on the voices of many citizens."

To put together the new energy policy, the government is soliciting public opinion while presenting three options for reducing Japan's nuclear energy proportion of total power generation by 2030: zero percent, 15 percent or 20 to 25 percent, compared with 26 percent in fiscal 2010.

Meanwhile, Edano said that even if utilities are required to decommission their reactors earlier than planned under the new policy, costs for the decommissioning should be shouldered by the utilities in principle.

"Basically, they're costs that should be covered by electricity companies," he said, urging utilities to set aside if necessary adequate reserves for possible acceleration of reactor decommissioning.

But as for the decommissioning of the Fukushima No. 1 plant, he said the government needs to consider the matter "comprehensively," implying the possibility of offering public support. He said the Tokyo Electric Power Co. plant should be decommissioned to revitalize Fukushima.

Edano said that if utilities ask the government to approve their plan to raise electricity rates, the government will apply the same screening criteria as it used when examining a rate-hike proposal by the utility.

While it's possible some utilities may seek rate hikes to cover increasing thermal fuel costs to make up for the halt of their reactors, Edano said utilities wanting rate increases must have already started cost-cutting in line with criteria calling for a 20 percent cut in personnel costs.

"We would not allow them to say that they would set out to implement (restructuring) when they seek a rate hike," he said.