June 4, 2018
On April 5, 2018, the government’s Nuclear Damage Compensation Dispute Resolution Center notified residents of Namie Town, Fukushima Prefecture, and TEPCO of its decision to discontinue its efforts to achieve an Alternate Dispute Resolution (ADR) on the residents’ demand for additional compensation for mental anguish caused by the 2011 Fukushima nuclear accident.
Around 15,700 residents of the town near TEPCO’s crippled Fukushima Daiichi Nuclear Power Station (FDNPS) launched this class action lawsuit, demanding that the utility’s monthly compensation payments to them be raised from the present 100,000 to 350,000 yen per person. The town government acted as the representative of the residents’ group in this case.
Earlier, in March 2014, the center presented an ADR proposal that the compensation payments be increased by 50,000 yen per person (with increases of up to 80,000 yen for elderly people aged 75 or more) for a certain period of time. The Namie residents accepted the proposal, while the utility rejected it as many as six times, claiming that the increase would have too great an effect from the perspective of fairness with other evacuees. Confronted with this situation, the center has decided to discontinue its mediation efforts.
Since the nuclear accident at FDNPS, TEPCO has repeatedly insisted that its original standpoint was to carry out the accident clean-up and settlement operations in Fukushima, and that the utility was officially allowed to survive to fulfill this responsibility. For the purpose of extending appropriate and speedy damage compensation, the utility declared that it had set three targets, (1) to provide compensation to every single sufferer, (2) to extend it expeditiously and with careful attention to the sufferers’ needs, and (3) to pay respect to out-of-court settlement proposals.
The question now is, what has happened to the utility’s determination to fulfill this responsibility? How do they explain the gap between the three targets mentioned above and their refusal to accept the ADR proposal on the additional compensation for the Namie Town residents? TEPCO’s contradictory action is totally unacceptable.
Coincidentally, the Japan Atomic Power Company (JAPC) announced on the same day that TEPCO and Tohoku Electric Power Co. had complied with its request and agreed to jointly pay around 174 billion yen to JAPC. JAPC claimed that this huge amount of money is necessary for improving its Tokai No.2 Power Station (T2PS) facilities to meet the Nuclear Regulation Authority’s (NRA) new safety requirements. This announcement was made at NRA’s 562nd meeting on nuclear power plant compatibility with the new requirements, held on April 5.
According to the mutual contract, TEPCO is required to buy 80 percent of all electricity generated by T2PS, and Tohoku Electric Power, 20 percent. The two utilities are, therefore, extending financial support to JAPC in accordance with this ratio. The contract says, that when JAPC incurs massive debts that exceed its own capital, the two utilities will extend financial support to the company in the form of debt guarantees and other financial aid.
JAPC, jointly established by Electric Power Development Co. (J-POWER) and electric power companies, is a firm specializing in nuclear power generation. Officials of TEPCO and Kansai Electric Power Co. have assumed the post of company president alternately. The incumbent JAPC president, Mamoru Muramatsu, was previously a TEPCO Managing Executive Officer.
Of the four nuclear power reactors owned by JAPC, the Tokai Power Station, the first commercial nuclear power plant in Japan, and Unit 1 of the Tsuruga Power Station are in decommissioning phase, while the other two are planned to be reactivated. They are the T2PS and Unit 2 of the Tsuruga plant. Despite this plan, the restart of these two nuclear reactors appears to be extremely difficult. In the case of the Tsuruga plant, an NRA expert team has recently issued an assessment that an active fault lies under Unit 2 of the plant in Fukui Prefecture. To reactivate the T2PS, JAPC is required to win consent from six local communities located within a 30km radius of the plant.
Although JAPC is unable to restart its nuclear reactors and is incapable of generating power, it is receiving from Tokyo, Kansai, Chubu, Hokuriku, and Tohoku Electric Power Companies a huge amount of money as “electricity sale proceeds” each year based on the mutual contract. In FY2016, JAPC received 106.5 billion yen in total from the five utilities, of which TEPCO paid 43 billion yen.
The total amount received by JAPC from the five utilities during the six years after 2011 reached approximately 769.0 billion yen.
The utilities are raising this enormous amount of money by padding consumers’ electricity bills. This extra payment by consumers is spent on JAPC’s idled nuclear power plants that have no prospect of reactivation. Without this revenue, it is obvious that JAPC would have already become bankrupt. Meanwhile, the amount of additional compensation proposed in the ADR plan and refused by TEPCO totaled around 9.5 billion yen annually.
The government has allocated 13.5-trillion yen in government bonds for compensation to be paid by TEPCO, and it has already decided to convert more than 10 trillion yen of the bonds into Japanese currency. Furthermore, there is a strong possibility that the government’s financial assistance needed by TEPCO may eventually exceed this projected level. The government’s Nuclear Damage Compensation and Decommissioning Facilitation Corporation currently owns 54.69% of all shares in TEPCO, and depending on the situation regarding conversion of its preferred stock into common stock, its ownership may expand to 75% in the future. Without such generous financial support from the state, it is certain that the utility would have gone under a long while ago. TEPCO was officially allowed to survive because it has a duty to pay compensation to the Fukushima nuclear accident sufferers and to achieve decommissioning of the crippled Fukushima nuclear plant. This failed company, however, is abdicating this responsibility and is financially supporting another virtually-insolvent company. This is an extremely unusual and unreasonable situation.
On April 10, the Minister of Economy, Trade and Industry, Hiroshige Seko, reportedly expressed his approval of TEPCO’s financial support to JAPC, saying that this matter should be determined by the utility itself in accordance with its business management responsibility. This remark is also incomprehensible. At present, Keita Nishiyama, former Deputy Director-General for Economic and Social Policy of the Ministry of Economy, Trade and Industry (METI), assumes the post of a TEPCO Director, and Ryuichi Yamashita, former Director-General of the Natural Resources and Fuel Department in the METI’s Natural Resources and Energy Agency, is a TEPCO executive officer. In other words, it was METI, which holds more than 50% of TEPCO shares and dispatches its officials to the utility, that made this business decision.
However, it is impermissible for the government, which is spending such an enormous amount of taxpayers’ money on TEPCO, to allow the utility to give financial support to another collapsed company. In the first place, the government should never have tolerated the utility’s payment of as much as 270.8 billion yen to JAPC as money to purchase electricity over the past six years.
If the state is rich enough to permit TEPCO to spend massive funds for unnecessary purposes, it should force the utility to take responsibility for causing the Fukushima nuclear accident and reduce the financial burden borne by the Japanese public.
There is no need for TEPCO to survive any longer, because it has abdicated its responsibility for the nuclear accident and continues to support a virtually failed company.
The utility should go bankrupt and be liquidated.
* TEPCO’s annual electricity sales for 2016 totaled 241.5 billion kWh, which means each household is paying 789 yen to the utility annually. (The average electricity consumption per household in 2016 was 4,432kWh.)