Tokyo Electric Power Co. said it will need to consider raising electricity rates for the first time since 2012 unless it can restart the world’s biggest nuclear plant.
Resumption of the Kashiwazaki Kariwa station in Niigata Prefecture is essential for sustaining profits, Tepco President Naomi Hirose said in a Saturday interview at the utility’s headquarters in Tokyo. Tepco cannot continue to prop up earnings by postponing repairs and taking other cost-cutting measures, he said.
The operator of the crippled Fukushima No. 1 plant had expected to start two reactors at Kashiwazaki-Kariwa in July as part of its turnaround plan released in January last year. Tepco, which serves about 29 million customers in the Tokyo metropolitan area, pledged earlier this month to keep electricity rates unchanged at least this year even as inactive nuclear reactors pressure Japanese utilities to increase prices.
“Even as Kashiwazaki-Kariwa remains offline, we posted a profit last year and can probably do so again this year,” Hirose said. “I wouldn’t say there won’t be the third time, but we cannot expect it can last forever.”
The station, 220 km (137 miles) northwest of Tokyo, was idled for maintenance in March 2012. It consists of seven reactor units.
All of Japan’s 48 reactors remain idled as the Nuclear Regulation Authority’s safety checks and other restart processes have taken longer than expected. In addition, the majority of Japan’s public remain opposed to restarting nuclear reactors after the triple meltdown at Tepco’s Fukushima No. 1 plant, according to opinion polls.
Hirose said Tepco “must devote ceaseless effort” to gain understanding of the governor of Niigata prefecture, Hirohiko Izumida, a vocal critic of the utility, and of local communities on restarting the Kashiwazaki-Kariwa station.
Tepco returned to profit last fiscal year, ending three consecutive years of losses after the Fukushima disaster left it with massive liabilities. The utility forecasts a net income of ¥521 billion ($4.4 billion) for the year ending March 31, up from ¥438.6 billion profit in the previous period, according to its latest earnings report in January.
Tepco’s nonconsolidated pretax profit for the year ending March 2016 may be about ¥13 billion if the Kashiwazaki-Kariwa plant remains idled until December, the Nikkei newspaper reported Saturday, citing the utility’s forecast presented to lenders.
Pretax profit may be ¥65 billion if the station is restarted in October, while a resumption as early as in July is likely to help post a ¥199 billion profit in the same year, the newspaper said.