In its latest discussions on electricity market reform, the Ministry of Economy, Trade and Industry is reportedly considering a measure to financially help major power companies with decommissioning their nuclear plants. METI is reportedly weighing having new entrants to the liberalized power retail market shoulder part of the decommissioning cost, which would be added to the electricity bills of their customers. That would be nothing less than welfare for the major suppliers that are seeing nuclear power lose its cost advantages in the face of power retail deregulation since April. The government should avoid policies that could distort the principles of electricity business liberalization.
In its discussions launched in late September, the ministry says the committee will weigh establishing a system that would have power suppliers respond to "issues of public interest," such as investments to prepare for decommissioning nuclear plants and severe nuclear accidents amid market liberalization. That sounds like a legitimate question to consider, but the measures contemplated by the ministry pose many problems.
One is a change to the accounting system for decommissioning nuclear power plants. Tokyo Electric Power faces massive financial problems in dealing with its Fukushima No. 1 plant, which suffered triple meltdowns after it was hit by the March 2011 Great East Japan Earthquake and tsunami. The cost to decommission the crippled plant is certain to far exceed the estimated ¥2 trillion — in fact it is impossible to grasp the total cost at this stage since the technology to remove molten nuclear fuel from its reactors has not yet been established. Compensation for victims of the nuclear disaster, which was estimated in 2014 at ¥4.9 trillion, has already topped ¥6 trillion. The cost to decontaminate areas polluted with radioactive fallout from the plant is likely to top ¥2.5 trillion in the government's plan.