Japan passes bill requiring TEPCO to save money for decommissioning Fukushima plant
TOKYO, May 10 (Xinhua) — Tokyo Electric Power Company Holdings Inc. will be required to raise funds for the decommissioning of the crisis-hit Fukushima nuclear power plant following the passing of a bill in parliament on Wednesday.
Under the law revised with the passage of the newly-passed bill, the government-backed Nuclear Damage Compensation and Decommissioning Facilitation Corp. will be involved in the decommissioning of the stricken plant in a bid for the government to assert more control over the utility hemorrhaging its profits.
The cost of decommissioning the facility that went through multiple meltdowns in the wake of an earthquake-triggered tsunami knocking out its key cooling functions in March 2011 has surged from previous estimates of 2 trillion yen (17.56 billion U.S. dollars) to 8 trillion yen (70.24 billion U.S. dollars) and a state panel has called for funds to be raised without affecting the embattled utility’s performance.
The government forecasts that the plant’s decommissioning work, as well as compensation payouts and costs related to ongoing decontamination work, will amount to some 21.5 trillion yen (188.77 billion U.S. dollars) in total.
The new bill will require TEPCO, under the supervision of the government-backed organization, to set aside an annual sum each business year to be approved by the industry minister.
The amount eyed by the industry ministry required each year to be banked by the utility is around 300 billion yen for a period of 30 years.
The use of reserve funds for decommissioning work will also have to be signed off by the industry minister under the new scheme.
Private think tanks have put estimates for decommissioning the plant at being far higher than the government’s estimates.
TEPCO is also eyeing the restarting of four of its seven reactors at its Kashiwazaki-Kariwa power plant in Niigata Prefecture from April 2019 as means to secure more finances.
The local governor, however, is skeptical about the reactors going back online.
Tepco mandated to create fund for scrapping Fukushima plant
The Diet passed a bill Wednesday requiring Tokyo Electric Power Company Holdings Inc. to put aside extra funds to decommission its crisis-hit Fukushima nuclear power plant, as the state seeks to gain more financial control over the utility.
Under the revised law, the state-backed Nuclear Damage Compensation and Decommissioning Facilitation Corp. will also be involved in the decommissioning process.
Currently, Tepco has been using profits to pay for scrapping the Fukushima No. 1 plant, which was destroyed after a 2011 earthquake and tsunami triggered a triple meltdown.
The revised law is expected to take effect later this year. With the estimated cost of the decommissioning work already surging to ¥8 trillion from the previously forecast ¥2 trillion, a government panel has called for setting up a funding system that is not dependent on the company’s financial health.
The government projects the total cost to deal with the Fukushima nuclear disaster will reach ¥21.5 trillion, including decommissioning costs, compensation and decontamination work.
Under the new program, the state-backed organization will decide on the amount Tepco should store away each business year and the industry minister must approve it.
The utility must also formulate a financial plan and obtain the minister’s approval when it uses the reserve fund for its decommissioning work.
The new law will strengthen the monitoring power of authorities as well, enabling the industry ministry and the organization to conduct on-site inspections to check whether Tepco is putting aside the money.
The government has a major say in the utility’s operations after acquiring 50.1 percent of the company’s voting rights. Tepco faces huge compensation payments and decommissioning costs among other problems due to the 2011 disaster.
The industry ministry has projected roughly ¥300 billion will be needed annually for the next 30 years to complete the scrapping of the power plant, which involves the difficult procedure of extracting nuclear debris.
The costs could grow further. A study by a Tokyo-based private think tank has shown the bill for the decommissioning could balloon to between ¥11 trillion and ¥32 trillion assuming materials from the No. 1 to 3 reactors, which suffered core meltdowns, need to be specially treated for radioactive waste.
The Japan Center for Economic Research estimated the total cost of managing the disaster could reach ¥70 trillion, more than three times the government calculation.