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ECONOMY > Energy

METI eyes 30 years for TEPCO to pay off the debt

The Ministry of Economy, Trade and Industry (METI) on Dec. 9 showed a plan to Tokyo Electric Power Company Holdings (TEPCO), which caused the Fukushima Daiichi Nuclear Power Plant accident. According to the plan, TEPCO is to shoulder 15.9 trillion yen out of the 21.5 trillion yen, a total cost needed for clearing up the nuclear accident. METI intends to have TEPCO pay off its debt in 30 years with profits under this plan, which consists of three stages including restarting nuclear power stations currently suspended and consolidating TEPCO with other utilities. Whether the plan can be translated into reality as expected by METI, however, is questionable.

 

The first stage of the plan is to rationalize power transmission and distribution companies. METI estimates that this process will lead to an annual profit increase of 150 billion yen if the cost of electric power transmission can be lowered to the same level as those offered by most competitive companies in the U.S. and Europe.

 

The second stage is to restart the Kashiwazaki-Kariwa Nuclear Power Station in Niigata Prefecture. METI expects that the restart of two reactors at the station will improve profits by 100 billion yen a year. METI calculates that the first and second stages will produce an annual profit of 500 billion yen, which will be used over a period of about 30 years to pay back a total of 11.9 trillion yen for decommissioning the Fukushima reactors and compensating for damages. However, the newly elected Niigata prefectural governor, Ryuichi Yoneyama, who is cautious about the resumption of nuclear reactors, will take office in October; therefore, it will be difficult to gain his consent to the resumption for the time being.

 

The third stage, harder than the first and second stages, is for the government to sell its TEPCO shares and allocate the money from the sales for decontamination that is estimated at 4 trillion yen. To realize the third stage, TEPCO’s stock price, currently about 520 yen, must be at least three times higher than that level. (Abridged)

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