Tepco update

TEPCO looks to become nationalized to gain taxpayer funds as expenses balloon

The TEPCO headquarters building, center. (Mainichi)

The troubled Tokyo Electric Power Co. (TEPCO), the operator of the disaster-crippled Fukushima No. 1 Nuclear Power Plant, has begun looking into the possibility of being nationalized through an injection of taxpayer funds to cover snowballing expenses in the aftermath of the nuclear disaster.

The move comes after Economy, Trade and Industry Minister Yukio Edano demanded late last year that the utility be substantially nationalized, to which TEPCO has not given a clear response. Faced with mounting costs for covering alternative fuels following the suspension of crippled nuclear plants and for decommissioning the troubled reactors, however, the utility announced on Jan. 12 that it had started considering the nationalization option.

"I'd also like to discuss a capital increase (by the government) in a comprehensive special project plan (to be drawn up by TEPCO in March)," said TEPCO Vice President Takashi Fujimoto at a press conference for the Federation of Electric Power Companies of Japan on Jan. 12.

TEPCO currently projects that it will cost the company an additional amount of some 830 billion yen in fuel expenses a year to replace nuclear power generation with thermal power generation, which will leave the company's consolidated settlement for the business year ending March 2012 some 600 billion yen in the red. The utility also faces massive expenses for decommissioning troubled reactors and decontaminating areas tainted by radioactive materials emitted by the Fukushima nuclear plant, which will possibly result in excessive debts in the business year ending March 2013.

The utility has already started selecting financial institutions that can serve as advisors to the company in receiving public money. Since some officials in the utility assert that they "want to retain management rights even after accepting public assistance," it may take some time before the utility makes a final conclusion on the nationalization plan.