New rules for utilities deciding to scrap their nuclear reactors?

August 7, 2013   

Panel drafts accounting rule revision for reactor decommissioning

http://mainichi.jp/english/english/newsselect/news/20130807p2g00m0dm042000c.html

TOKYO (Kyodo) -- An industry ministry panel on Tuesday drafted changes in accounting rules for electric power companies to prevent their business from deteriorating sharply if they decide to scrap nuclear reactors earlier than planned.

Utilities are currently required to set aside reserves for decommissioning each of their reactors while the facility is in service. The draft allows them to continue to set aside the funds for 10 years beyond the end of a reactor's operation.

The rule change, expected to be finalized later in the year, would enable a utility to avoid booking a large extraordinary charge in a single year to cover a shortfall in decommissioning funds.

The revision would also include measures to prevent a utility from facing a sudden drop in the asset value of the nuclear facility.

The review comes as Japan introduced new safety requirements for reactors in early July, which could lead utilities to give up restarting some of their reactors rather than invest in costly safety measures to meet the new regulations compiled in the wake of the 2011 Fukushima Daiichi complex disaster.

The draft, compiled by the panel, will be finalized after soliciting public comments.