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Fukui reactor restarts not enough to let Kepco off power crunch hook

JIJI

Kansai Electric Power Co. will still be pressed to provide enough power this summer despite plans to restart a second reactor.

The reactivation of reactors 3 and 4 at the Oi power plant in Fukui Prefecture will boost Kepco’s output capacity by 4.46 million kw, bringing total capacity to 29.88 million kw — just enough to meet its estimate for peak demand but short of the 3 percent buffer usually seen as necessary to ensure stable power.

Output could be affected by problems at one of the thermal power plants being run to offset shortages stemming from the nation’s sudden break with nuclear power after the Fukushima nuclear meltdowns.

Households and companies have been urged to save power, but a trade ministry official said that a string of hot days could cause air conditioner use to soar beyond the limit.

“We are on thin ice, since it is impossible to rule out the possibility of large-scale outages,” the official said.

The government’s endorsement of the Oi plant’s safety is meanwhile provisional.

The plant lacks an earthquake-proof facility to use as an emergency control center during emergencies and a filtered venting system to limit the release of radioactive material if the reactors have to be vented. The two facilities are scheduled to be installed in fiscal 2015.

The new nuclear regulator that will be established later this year will have to draft new safety standards and strictly examine operations at the Oi power plant.

Since public distrust of the government and nuclear safety is rife, Kepco will have to emphasize the safety of the Oi plant and make sure any problems are fully disclosed.

Utilities plan bond sales

Kansai Electric Power Co. and Chugoku Electric Power Co. plan to issue bonds this month in what will be their first debt offerings since the nuclear crisis began in March last year, sources said Thursday.

Each is expected to issue about ¥20 billion worth, the sources said.

The companies believe that investor concerns about utilities’ financial conditions have eased thanks to plans to restart two of the four reactors at Kepco’s Oi plant in Fukui Prefecture. The two utilities apparently believe this has paved the way for them to resume bond issues, the sources said.

The bonds will be redeemed in five years and both have selected brokerages to lead-manage the sales.

The precise issue amounts will be decided after investor demand has been assessed, the sources said.

The credibility of utilities in general has suffered since the nuclear crisis started at Tokyo Electric Power Co.’s Fukushima No. 1 plant in Fukushima Prefecture following the March 11 earthquake and tsunami last year.

Tohoku Electric Power Co. has so far been the only one to issue bonds since the start of the crisis.

Issue terms for the coming bonds would be tough, the sources said, noting that Kansai Electric and Chugoku Electric are expected to face higher interest costs than before the nuclear crisis because investors have yet to fully dispel their concerns about the industry’s business conditions.