Fukushima Nuclear Disaster Bill to Double to $188 Billion

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Fukushima nuclear disaster bill to double to 21.5 trillion yen
Total costs to resolve the 2011 Fukushima nuclear disaster will reach 21.5 trillion yen (about $188 billion), nearly double the previous estimate, which will be passed on to users in higher electricity bills.
The industry ministry said on Dec. 9 that the final tab for the accident at the crippled Fukushima No. 1 nuclear power plant is estimated to balloon from the 11 trillion yen calculated in 2013.
To prevent the plant operator, Tokyo Electric Power Co., from going bankrupt under the skyrocketing costs for decommissioning, compensation and decontamination, the government said it will increase the maximum amount of its zero-interest loans to the utility from the current 9 trillion yen to 13.5 trillion yen.
Much of the additional costs will be eventually covered by the public, as the government plans to raise electricity charges to that end.
Within the total, compensation paid to people affected by the nuclear accident will increase from 5.4 trillion yen to 7.9 trillion yen. Bills for decontaminating areas polluted with radioactive substances will rise from 2.5 trillion yen to 4 trillion yen.
The rise in compensation costs is mainly attributable to a new support measure adopted for people in the agricultural and forestry sectors who cannot restart their work due to restrictions on the shipments of their products.
The increase in decontamination costs was mainly led by the rise in prices of bags to hold contaminated materials and the larger-than-expected personnel costs of decontamination workers.
The compensation costs will be temporarily covered by the government. But TEPCO will eventually shoulder most of the burden, in principle, spending many years paying it off. Other major utilities and newly established electric power companies will also contribute in the form of a rise in electric power cable usage fees.
The Ministry of Economy, Trade and Industry also unveiled plans to increase TEPCO’s revenues to decrease the burden on the public.
The plan calls for TEPCO to increase its annual profits from the current 400 billion yen to 500 billion yen by cutting costs in the field of electricity transmission and distribution. It also expects an additional 100 billion yen through restarting the Kashiwazaki-Kariwa nuclear power plant in Niigata Prefecture.
Fukushima cleanup to cost 21.5 trillion yen, double original estimate
The cost of dealing with the aftermath of the disaster at the Fukushima No. 1 Nuclear Power Plant will reach 21.5 trillion yen, roughly double the government’s initial prediction of 11 trillion yen, preliminary calculations released on Dec. 8 by the Ministry of Economy, Trade and Industry have shown.
The government plans to have new electricity suppliers and major utilities including the plant’s operator, Tokyo Electric Power Co. (TEPCO), tack a portion of the additional costs onto power bills.
The ministry calculated that the cost of compensating people affected by the disaster would rise from 5.4 trillion yen to 7.9 trillion yen. The cost associated with decontamination and the construction of interim storage facilities for radioactive waste, meanwhile, was expected to rise from 3.6 trillion yen to 5.6 trillion yen. The ministry estimated that TEPCO would end up paying around 8 trillion yen to decommission the plant’s reactors, up from an initial estimate of 2 trillion yen.
TEPCO and other major power companies are covering the cost of compensation payments but the ministry plans to make new power producers and suppliers also pay some compensation. A ministry representative explained, “Customers of power producers and suppliers that have newly entered the market used power from major utilities in the past, and benefitted from nuclear power plants.”
Over a 40-year period beginning in 2020, new power producers and suppliers are set to add part of the additional costs of compensation payments to “wheeling charges” that they pay to use the lines of major power suppliers such as TEPCO, which will be passed onto power bills. However, new power producers and consumer groups say this runs counter to the aims of liberalization of the power market, which aims to stimulate the market with the entry of newcomers.
The ministry hopes to quieten resistance from market newcomers by having major utilities furnish them with relatively cheap power through the market, including nuclear and hydro power. Major utilities, however, are unhappy with this approach.
The cost of decommissioning the reactors at the Fukushima plant will be left in TEPCO’s hands. A system will be created to have the Nuclear Damage Compensation and Decommissioning Facilitation Corp. collect profits that TEPCO acquires through streamlining of its management, which will be paid out under government supervision.
At this stage, however, the method of decommissioning the reactors at TEPCO’s Fukushima No. 1 plant has yet to be established.
“It is difficult to accurately calculate at this stage how much it will cost to decommission the reactors,” a ministry representative commented. There are accordingly fears that the decommissioning cost could rise in the future.
The government plans to extend the amount of compensation bonds loaned to TEPCO from the current 9 trillion yen to 14 trillion yen. It is possible that this could lead to an increased burden on the public in the future.
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