Nuke crisis compensation costs tacked onto power bills to face 4 tril. yen cap

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The Economy, Trade and Industry Ministry is set to limit the amount of additional costs of compensating those affected by the Fukushima nuclear crisis, tacked onto “wheeling charges” that power companies pay to use power lines, to 2.4 trillion yen, sources close to the ministry said.

The amount would eventually be added to power charges that consumers pay. Moreover, the ministry admitted that the total amount to deal with the aftermath of the nuclear disaster, which it estimates at 21.5 trillion yen, will certainly increase further.

The ministry made the disclosure at a meeting of the ruling Liberal Democratic Party (LDP) panel on the issue on Dec. 12 in response to concerns expressed by LDP legislators that the cost of dealing with the crisis could rise.

The estimated total amount of compensation for the Fukushima crisis, which had been estimated at approximately 5.4 trillion yen in 2013, has grown to about 7.9 trillion yen.

Following the outbreak of the nuclear crisis, a system has been established under which Tokyo Electric Power Co. (TEPCO), operator of the crippled Fukushima No. 1 Nuclear Power Plant, and other major power companies contribute funds for compensation payments in proportion to the outputs of their nuclear plants.

In order to secure funds to cover an increase in the total compensation cost from 5.4 trillion yen, the ministry has proposed to a panel of experts on decommissioning of the Fukushima plant and compensation payments that the additional cost be added to wheeling charges. Not only major power companies but new market entrants would be required to foot the bill, which would eventually be added to power charges paid by consumers.

The ministry explains that it aims to require market newcomers to foot part of the compensation cost in order to “prevent consumers who have benefited from nuclear power by major power companies from switching to new power companies to avoid footing the compensation cost.”

However, some experts have pointed out that such a move would run counter to the liberalization of the power market designed to spur new market entries.

Moreover, since the industry ministry is authorized to set the amount of wheeling charges at its own discretion without going through Diet deliberations, some members of the experts’ panel and the LDP have voiced concerns that the amount of compensation costs passed onto consumers could unlimitedly snowball.

In response to such concerns, the ministry is considering obligating power companies to clearly show the amount of compensation cost each consumer is required to shoulder in detailed statements on power charges. Moreover, if the amount of compensation were to increase further, the ministry would consider other measures to cover the additional cost, which could also increase the burden on consumers.

The industry ministry has also disclosed that the estimated cost of dealing with the accident, which it released on Dec. 9, does not include the expense of creating hubs for reconstructing affected areas where residents are unlikely to be able to return in the foreseeable future and that of disposing waste to be generated when fuel debris is removed from the crippled reactors.

Therefore, the estimated total cost of dealing with the aftermath of the disaster, which has almost doubled from 11 trillion yen as of 2013 to 21.5 trillion yen, will certainly increase further.

http://mainichi.jp/english/articles/20161213/p2a/00m/0na/012000c

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