Tepco May Seek More Government Funds for Fukushima Clean-Up Cost

Tokyo Electric Power Co. may ask the government for more funds to cover decontamination and reactor decommissioning costs from last year’s nuclear disaster at its Fukushima Dai-Ichi atomic plant.

The utility known as Tepco estimates it may cost about 10 trillion yen ($125 billion) to decontaminate areas around the plant, the Mainichi newspaper reported, citing a mid-term business plan to be announced today. Decommissioning costs for the damaged reactors will probably exceed an earlier projection of 1.15 trillion yen, the newspaper said.

In July, the Nuclear Damage Liability Facilitation Fund took control of Tepco in return for a 1 trillion yen capital injection after the disaster left the utility on the brink of bankruptcy. The survival of Tepco, which has received 1.4 trillion yen in state funds to compensate those affected by the disaster, hinges on whether it receives more aid, said Hirofumi Kawachi, an energy analyst at Mizuho Investors Securities Co.

“The government is likely to refuse to cover all the additional expenses” as extra aid would draw public criticism, Kawachi said by phone today.

The utility will “request the government to consider additional measures” to cover the costs of decommissioning and compensation including decontamination, Tepco said in May in its earlier business plan approved by Trade and Industry Minister Yukio Edano, who oversees energy companies.

On May 11, Edano indicated the government may pay part of the costs to decontaminate areas around the Fukushima plant while Tepco should be responsible for expenses to decommission and dismantle the reactors.

The utility plans to set up a Fukushima headquarters as early as January and increase the number of employees assigned to recovery work in the prefecture to more than 4,000 from 3,500, the Mainichi newspaper reported Nov. 3, citing the mid- term plan.

Tepco said in May it will cut more than 3.37 trillion yen in costs over 10 years. The business plan calls for additional cuts of about 100 billion yen a year, the Mainichi said.

Tepco spokesman Tsuyoshi Numajiri declined to comment on the mid-term business plan before the official announcement today at 2 p.m.

 

 – Bloomberg