Utilities face hike in redress fund ante

Kyodo

The government plans to make the nation’s 12 nuclear plant operators start paying ¥150 billion a year to the state-backed facility set up to help Tokyo Electric Power Co. compensate people affected by the Fukushima disaster.

That’s is 1½ times the initially proposed amount, sources said.

The government ramped up the amount because of growing calls from victims who fear the compensation process might be disrupted, the sources said Sunday.

The nuclear disaster was triggered after the tsunami last March 11 knocked out vulnerable cooling systems at Tepco’s Fukushima No. 1 power plant, leading to three reactor core meltdowns and exposing the lack of diligence and disclosure in the nuclear power industry.

The contribution program is intended to spread the burden for the Fukushima crisis over the entire atomic power industry and covers nine of the nation’s 10 electric utilities, excluding Okinawa Electric Power Co., which does not operate a nuclear plant. The fund also covers Japan Atomic Power Co., Electric Power Development Co. and Japan Nuclear Fuel Ltd.

The government will finalize details of the program, including the higher contribution, by the end of fiscal 2011, which is March 31. The payments would start in fiscal 2012.

Contributions by the 12 companies became mandatory with the establishment of the Nuclear Damage Liability Facilitation Fund on Sept. 12. For fiscal 2011, the 12 companies are required to contribute a total of just over ¥70 billion to the state-backed fund for the period since its establishment.

Tepco will contribute ¥50 billion to the fund annually, the highest among the 12 companies, starting in fiscal 2012, and Kansai Electric Power Co. will contribute the second-largest sum, of ¥25.8 billion, as it operates more nuclear plants than other utilities.

Other expected contributions include ¥13.8 billion from Kyushu Electric Power Co., ¥13 billion from Chubu Electric Power Co. and ¥8.7 billion from Tohoku Electric Power Co.

There is opposition among government officials to increasing contributions to the fund amid concern that utilities could be prompted to raise electricity charges, the sources said. But the government intends to go ahead with the increase, expecting that electricity charges will be held in check as the Ministry of Economy, Trade and Industry is reviewing utilities’ cost calculations when setting the price for power.