The election Sunday of Ryuichi Yoneyama as the new governor of Niigata Prefecture may make the financial situation at Tokyo Electric Power Company Holdings Inc. even more unstable, as Yoneyama is cautious about restarting reactors at the company’s Kashiwazaki-Kariwa nuclear power plant.
In the wake of the March 2011 accident at TEPCO’s Fukushima No. 1 nuclear plant, operations at all of the company’s 11 nuclear power reactors were suspended — excluding those at the Fukushima No. 1 plant, which are to be decommissioned.
The Kashiwazaki-Kariwa plant holds seven of the company’s reactors, all of which have been idle since March 2012.
TEPCO has applied for safety inspections to be carried out by the Nuclear Regulation Authority on two of the reactors at the plant.
TEPCO’s dependence on crude oil and liquefied natural gas has deepened because the company relies mainly on thermal power generation. As thermal power plants are affected by the import prices of the fuels, the situation is weighing on TEPCO’s financial situation.
If just one reactor at the Kashiwazaki-Kariwa plant can be reactivated, TEPCO’s annual profit is expected to rise by up to about ¥100 billion. The reactors can produce electric power at a lower cost than thermal power generation.
For now, TEPCO remains profitable, but this is largely because lower crude oil prices have lowered the company’s expenditures.
Though crude oil prices are currently low, prices are forecast to rise in mid- and long-term projections.
If the fuel costs of thermal power plants rise, electric power companies’ balance sheets will be adversely affected. This will make nuclear power plants increasingly important.
However, during the election campaign, Yoneyama said, “Unless examinations of the accident in Fukushima Prefecture are completed, it’s not possible to begin discussions about reactivation.”
The possibility he will tolerate swift reactivation of the reactors is very low, even if the Kashiwazaki-Kariwa plant passes the NRA’s safety inspections.
The total amount of compensation for those adversely affected by the accident at the Fukushima No. 1 nuclear power plant has surpassed ¥6 trillion, and the amount is likely to grow.
It is also assumed that work to decommission the reactors that caused the accident will cost trillions of yen. Thus TEPCO has asked for assistance from the government.
An expert panel of the Economy, Trade and Industry Ministry began discussions this month about TEPCO’s future direction, and how to share the financial burden of decommissioning nuclear reactors.
Reactivation of its nuclear reactors will be key to stabilizing TEPCO’s financial situation back on track, and enable the company to procure funds for compensation for damage and future decommissioning.
Anxiety will continue to mount over TEPCO’s financial situation the longer reactivation is delayed.
Electricity rates of major electric power companies in fiscal 2015 were about 20 percent higher on average for households, and about 30 percent higher on average for corporate users, compared to before the nuclear accident.
In TEPCO’s service area, the rates for households currently stand about 20 percent higher than before the nuclear accident.
An analyst estimated that if reactors Nos. 6 and 7 of the Kashiwazaki-Kariwa plant are reactivated, TEPCO will be able to lower the rates by 2 to 3 percent.