Japan Atomic financial fears deepen

by Kazuaki Nagata

Staff Writer

Concern over Japan Atomic Power Co. suffering a major financial crisis is spreading after the nuclear industry watchdog determined this week that a fault running directly beneath reactor 2 at the firm’s Tsuruga nuclear plant is active and poses a serious danger.

The announcement by a Nuclear Regulation Authority panel Monday could force Japan Atomic Power to decommission the unit, and also makes it highly unlikely that it can proceed with the planned construction of two more reactors at the facility in Fukui Prefecture.

Nuclear safety guidelines ban power companies from building reactors and other critical safety equipment on top of active faults, meaning Japan Atomic Power will likely be left with no alternative other than to scrap the No. 2 reactor.

To make matters worse, the only other unit at the complex is 42 years old and, according to revised legislation enacted this year to regulate nuclear plant operators, reactors in operation for more than 40 years should in principle be decommissioned.

The company’s only other commercial nuclear reactor, at the Tokai No. 2 power station in Ibaraki Prefecture, has meanwhile been suspended in the wake of the Fukushima meltdowns and there appears little prospect of it resuming operations anytime soon.

If Japan Atomic Power were forced to scrap both reactors at the Tsuruga facility as well as the Tokai No. 2 plant’s sole unit in the current fiscal year, the loss it would incur from writing off equipment and the company’s shortage of reserves for the decommissioning work would total some ¥256 billion, according to estimates released by the industry ministry in May.

This figure greatly exceeds the firm’s total net assets of around ¥162.6 billion. Japan Atomic Power posted a ¥12.8 billion net loss for the business year through last March, its first net loss in 12 years.