Tepco to form power grid consortium with industry peers in 2020s

JIJI

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Tokyo Electric Power Company Holdings Inc. will form a consortium with industry peers to integrate their power grid operations in the early 2020s, officials have said.

The officials disclosed the idea at a meeting Wednesday of an expert panel set up by the industry ministry that discusses reform measures for Tepco, which is struggling as it faces massive costs related to the March 2011 triple meltdowns at its Fukushima No. 1 power station in Fukushima Prefecture.

The reform measures, to be finalized next week, will be reflected in a revised Tepco rehabilitation plan to be launched as early as January by the power firm and its government-backed supporter, Nuclear Damage Compensation and Decommissioning Facilitation Corp.

In its draft reform measures, the panel said Tepco will cover ¥16 trillion of nuclear disaster-related costs, now predicted to reach ¥21.5 trillion in total, about double the previous estimate.

Looking to the example of Jera Co., a thermal power and fuel firm set up jointly by Tepco and Chubu Electric Power Co., the panel proposed that Tepco form consortia to integrate nuclear power and power grid operations with industry peers.

In response, Tepco officials said their company will start talks on proposed power grid business integration in 2017, ahead of the full mandatory separation of power companies’ power generation and power grid operations, slated for April 2020.

The draft reform measures call on Tepco to set up a fund for money saved from its earnings in order to help cover ¥8 trillion in reactor decommissioning costs at the Fukushima plant. The estimated costs shot up from the previously projected ¥2 trillion.

New entrants to the industry following the full liberalization of power retailing in April will be required to help cover ¥240 billion of the costs to compensate for damage caused by the nuclear disaster, which are put at ¥7.9 trillion against the previous projection of ¥5.4 trillion. New entrants will pay costs through the power grid usage fees charged by conventional power firms.