Helping Tepco compensate
(From The Japan Times October 8 issue)

A government panel submitted a final report on Tokyo Electric Power Co.‘s management and financial situation to Prime Minister Yoshihiko Noda on Oct. 3. Its purpose was to find ways to raise funds for compensation to victims of the accidents at the Fukushima No. 1 nuclear power plant. It estimated the amount of redress claims by the end of March 2012 at ¥4.5 trillion. The government has set up an entity tasked with securing funds for the redress. Public money will be injected into it if necessary.

The panel called on Tepco to raise ¥707.4 billion by selling assets and to reduce costs by ¥2.545 trillion over 10 years (roughly twice the amount Tepco originally planned), including cutting the Tepco group’s workforce by 7,400, or 14 percent, and reducing pensions for current and retired workers.

The Tepco management should take responsibility for the nuclear fiasco in concrete forms, such as resignation, salary cuts and relinquishing of retirement allowances.

The panel called for a change to the pricing system under which a utility adds a certain amount of profit to the cost of power generation and passes on the total amount to users as electricity bills.

Such a change could help break utilities’ regional monopoly. The panel said that in the past 10 years, Tepco overrated the cost by ¥592.6 billion. People should strictly watch Tepco and other utilities’ attempts to crush any changes to the pricing system.

The panel said if Tepco cannot restart its Kashiwazaki Kariwa nuclear power plant in Niigata Prefecture, it will need to borrow ¥4.2 trillion to ¥8.6 trillion. It also said if Tepco does not raise electricity rates, it will not be able to write a business plan for the coming 10 years.

The panel also estimated the cost of decommissioning the Nos. 1, 2, 3 and 4 reactors at the Fukushima No. 1 power plant at ¥1.151 trillion. But the cost could be much larger. The panel’s estimate can be regarded as a deliberate attempt to make it appear that Tepco’s assets exceed its debts.

日本語の抄訳はウィークリー10月15日号のP18に掲載されています。